Management Accounting Assignment Help
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The document outlines various problems related to job costing and inventory costing in management accounting. It includes two main problems involving the calculation of predetermined allocation rates, indirect manufacturing costs, and differences between absorption and variable costing methods, complete with financial data and required calculations. The answers provide detailed insight into determining costs and inventory performance metrics necessary for manufacturing companies.
Management Accounting Assignment Help
- 1. MANAGEMENT ACCOUNTING – ASSIGNMENT HELP Problem 1) Job Costing Description In this part of the project, there are two independent problems that study job costing systems. Learning objectives 1) Outline the seven step approach to job costing. 2) Track the flow of costs in a job costing system. Problem One Directions Jordan Manufacturing Company has the following departments with the following data: Department X Department Y Overhead allocation base direct labor cost machine hours Budget departmental annual data Direct labor costs $180,000 $165,000 Indirect manufacturing costs $225,000 $180,000 Machine hours 51,000 40,000 Actual data for Job 101 Direct material costs $10,000 $16,000 Direct labor costs $11,000 $14,000 Machine hours 5,000 3,000 Required: A. Determine the predetermined allocation rate for department X. B. Determine the predetermined allocation rate for department Y. C. Determine the amount of indirect manufacturing costs allocated to Job 101. D. Assume that Job 101 is comprised of 50 finished units. Determine the total manufacturing cost per unit of Job 101. Answers: A. The predetermined allocation rate for Department X will be 225000/180000=1.25 B. The predetermined allocation rate for Department Y will be 180000/40000=4.5 C. The amount of indirect manufacturing cost allocated to Job 101 will be: For Department X: 11000*1.25= $13750 For Department Y: 3000*4.5= $13500 Total indirect manufacturing cost allocated to Job 101 is $27,250 D. 1
- 2. Department X Department Y Total Material Cost 10,000 16,000 26,000 Labor Cost 11,000 14,000 25,000 Indirect Manufacturing Cost 13,750 13,500 27,250 Total Cost 78,250 No of Units 50 Cost per Unit 1,565 Problem Two Directions Leblanc Manufacturing Company has the following financial data for the year: Direct materials ending inventory balance $15,000 Work in process ending inventory balance $34,500 Finished goods ending inventory balance $49,500 Under applied factory overhead $4,000 Cost of goods sold $74,500 Direct materials purchased $41,000 Direct materials consumed $47,000 Cost of finished goods completed $102,000 Factory overhead applied to jobs $48,000 Factory overhead application rate 120% of direct labor dollars Assume the under applied overhead has NOT yet been charged off. Required: A. Determine beginning direct materials inventory. B. Determine direct labor costs incurred during the year. C. Determine beginning work in process inventory. D. Determine beginning finished goods inventory. E. Determine actual factory overhead (indirect manufacturing costs) incurred during the year. Answers: A. We know that Opening Inventory + Purchases-Closing Inventory= D. Materials Consumed. Therefore, Opening Direct Material Inventory = 47,000 + 15,000 – 41,000 = $21,000 B. Factory Overhead applied to jobs = $48,000 & Factory Overhead application rate is 120% of direct labour dollars. Therefore, Direct labor cost = 48,000/1.2 = $40,000 C. Amount Amount Opening Inventory $21,000 Add:Purchases $41,000 Less: Closing Inventory $15,000 Direct Materials Consumed $47,000 2
- 3. Direct Labor $40,000 Prime Cost $87,000 Factory Overhead $48,000 Factory Cost (Gross) $135,000 Add: Opening WIP Inventory $1,500 Less: Closing WIP Inventory $34,500 Works Cost $102,000 Add: Office & Administration Overhead $0 Costs of finished goods completed $102,000 In the above table, Opening WIP inventory has been calculated which is $1500. D. We know, Total Cost of Production + Opening Finished Goods Inventory-Closing Finished Goods Inventory=Cost of Goods Sold Therefore, Opening Finished Goods Inventory= $74,500 + $49,500 - $1,02,000= $22,000 E. Actual Factory Overhead incurred = $48,000+$4,000 = $52,000 Part Two: Inventory Costing Description In this part of the project, there is one problem that studies variable costing and absorption costing. Learning objectives 1) Understand what distinguishes variable costing form absorption costing. 2) Determine differences in income between variable costing and absorption costing. Directions Jarvis Manufacturing Company has the following financial data for the year: Sell price per unit $20 Direct labor time required per unit 15 minutes Fixed selling and administrative costs $40,000 Fixed indirect manufacturing costs $132,000 Direct materials cost per unit $2 Direct labor cost per hour $24 Variable indirect manufacturing cost per unit $4 Variable selling expenses per unit $2 Units produced 30,000 Units sold 28,000 Beginning inventory units 0 Assume actual costs and production units equal budget costs and production units. Required: A. Determine the inventoriable cost per unit under absorption costing. B. Determine the inventoriable cost per unit under variable costing. C. Determine the cost of goods sold under absorption costing. 3
- 4. D. Determine the cost of goods sold under variable costing. E. Without preparing financial statements and focusing only on ending inventory, determine the difference in operating income between absorption costing and variable costing. Answers: A. Inventoriable Cost per unit under absorption costing = $2 + ($24/4) + $4 + ($132,000/30,000) = $16.4 B. Inventoriable Cost per unit under variable costing = $2 + ($24/4) + $4 = $12 C. Cost of Goods Sold under Absorption Costing: Amount Direct Materials Cost $60,000 Direct Labor Cost $180,000 Prime Cost $240,000 Add: Fixed Indirect Manufacturing Cost $132,000 Add: Variable Indirect Manufacturing Cost $120,000 Total Cost of Production $492,000 Less: Closing Stock of finished goods $32,800 Cost of goods sold $459,200 D. Cost of Goods Sold under Variable Costing: Amount Direct Materials Cost $60,000 Direct Labor Cost $180,000 Prime Cost $240,000 Add: Variable Indirect Manufacturing Cost $120,000 Total Cost of Production $360,000 Less: Closing Stock of finished goods $24,000 Cost of goods sold $336,000 E. Difference in the net income obtained under absorption costing and variable costing = Ending Inventory*Fixed Indirect Manufacturing Cost per unit = 2000*(132000/30000) = $8800 4