Labour overhead total in process 323 6750 3000 3600

Labour Overhead Total
In process 323 $ 6,750 $ 3,000 $ 3,600 $ 13,350
324 1,700 500 600 2,800
Completed 322 6,350 4,875 5,850 17,075
FNSACC517 Provide management accounting information Assessment Guide v1.0
Copyright © Mentor Education Pty Ltd RTO 21683
21

During the month of June, the following transactions occurred:
$ $
Materials purchased on credit 24,700
Factory wages paid - Gross 29,000
- PAYG Tax 6,700 22,300
Factory rent paid 2,500
Invoices for sundry factory overhead items 2,000
Depreciation at 15% per annum is to be charged on factory plant valued at $160,000.
Material issued to the factory and labour charged for the month were:
Job No. Material Labour
323 $ nil $ 1,175
324 5,600 4,400
325 12,000 9,250
326 4,500 1,000
Indirect 3,000 9,800
25,100 25,625
Factory overhead is applied using a rate of 120% of direct labour cost. Any over/under-applied
overhead is transferred to cost of goods sold at June 30. At 30 June, Job No. 326 was incomplete.
Job Nos 322, 323 and 324 had been completed and sold on credit, while Job No. 325 was still in
the finished goods warehouse. The jobs sold had a total sales value of $81,744.
Task 1
Prepare and balance the following accounts (a single ledger is used):
a. Raw Materials Control
b. Labour Control
c. Factory Overhead Control
d. Factory Overhead Applied
e. Work in Process
f. Finished Goods
FNSACC517 Provide management accounting information Assessment Guide v1.0
Copyright © Mentor Education Pty Ltd RTO 21683
22

Case study 2
Zubi Pty Ltd prepared a summary showing the following expected costs for a production level of
50,000 units:
Direct labour $ 80,000
Fixed manufacturing overhead 60,000
Fixed selling and administration 110,000
Variable manufacturing overhead 30,000
Variable manufacturing 250,000
Variable selling 70,000
Zubi Pty Ltd accounts for all manufacturing costs as inventoriable (product) costs.
Task 2
Calculate the following TOTAL costs:
a. Conversion cost
b. Product cost
c. Prime cost
d. Period cost
e. Expected manufacturing overhead cost for a production level of 60,000 units.
Case study 3
The following information has been prepared from the accounting records of Double Ltd for the
six-months to 30 June 2018. The business uses a periodic inventory system.
Accounts receivable $
Balance 01/01/2018 178,300
Sales 1,846,500
Inventories 01/01/2018
Raw Materials 95,940
Factory Supplies 8,440
Finished Goods 174,690
Work in Process 28,650
Factory insurances:
Prepaid 01/01/2018 2,920
Annual Premium paid 01/04/2018 12,360
Factory Plant & Equipment:
At cost 01/01/2018 343,800
Accumulated Depreciation 01/01/2018 154,710
Depreciation - Straight-line @ 10% p.a. ?
Accounts payable:
FNSACC517 Provide management accounting information Assessment Guide v1.0
Copyright © Mentor Education Pty Ltd RTO 21683
23