6 000 C443 Operating activity Activity to 30 November December activity Actual

6 000 c443 operating activity activity to 30 november

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6 000
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C4.43 Operating activity Activity to 30 November December activity Actual manufacturing overhead incurred: Indirect material $375 000 $27 000 Indirect labour 1 035 000 90 000 Utilities 735 000 66 000 Depreciation 1 155 000 105 000 Total overhead $3 300 000 $288 000 Other items: Raw material purchases* $2 895 000 $294 000 Direct labour cost $2 535 000 $240 000 Machine hours 73 000 6 000 Account balances at beginning 1 January: Raw material inventory* $315 000 Work in process inventory 180 000 Finished goods inventory 375 000 *Raw material purchases and raw material inventory consist of both direct and indirect materials. The balance of the raw material account as at 31 December is $255,000.
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(1) How much manufacturing overhead would Optic Vision have applied to jobs to 30 November? POHR = $45 per machine hour Actual number of machine hours from 1 st January to 30 th November = 73,000 hours Overhead applied = $45 x 73,000 hours = $3,285,000 Overhead applied = Pre-Determined Overhead Rate x Actual activity of cost driver Operating activity Activity to 30 November December activity Machine hours 73 000 6 000
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(2) How much manufacturing overhead would be applied to jobs by Optic Vision during December?
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(3) Determine the amount by which the manufacturing overhead is overapplied or underapplied as at 31 December. Operating activity Activity to 30 November December activity Actual manufacturing overhead incurred: Indirect material $375 000 $27 000 Indirect labour 1 035 000 90 000 Utilities 735 000 66 000 Depreciation 1 155 000 105 000 Total overhead $3 300 000 $288 000 Actual manufacturing overhead $3,300,000 + $288,000 = $3,588,000 Applied manufacturing overhead $3,285,000 + $270,000 = $3,555,000 Underapplied manufacturing overhead of $3,588,000 - $3,555,000 = $33,000
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(4) Determine the balance in Optic Vision's finished goods inventory
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(5) Prepare a schedule of cost of goods manufactured for Optic Vision Pty Ltd for the year. ( Hint: In calculating the cost of direct material used, remember that Optic Vision includes both direct and indirect material in its raw material inventory account.) Calculating Cost of Goods Manufactured Beginning Work In Process Inventory + Total Manufacturing Costs Ending Work In Process Inventory Direct Materials Direct Labour Applied Manufacturing Overhead
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Direct Material: Raw Material Inventory, Jan 1 $315,000 Add: Raw Material Purchase 3,189,000 Total Raw Material Available for Use 3,504,000 Deduct: Raw Material Inventory, Dec 31 (255,000) Total Raw Materials Used (IM+DM) 3,249,000 Deduct: Indirect Material Used (402,000) Direct Material Used $2,847,000 Question 5 Cont.
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