MAF Group Assignments
Student Student ID
Cvetanka 19736222
Baltovska
Nadeen Razko 18953871
Micheil Alhakim 19455727
Tuan Kiet Huynh 17475769
Q1.
1) A job costing system is appropriate where each product, batch of products or order is
different, and costs can be readily identified with that specific product, batch, or
order.
2)
PS812 – Printer Stand
O/B November 30 250,000
Direct Materials 124,000
Purchased Parts 87,000
Direct Labor 200,500
Manufacturing 97,500 509,000
Overhead
C/B December 31 759,000
The working in process inventory account balance as at 31 December is $759,000
3)
Chairs units
Finished Goods Inventory 30 19,400
November
Units completed in December 15,000
Unit available for sale 34,000
Units shipped in December 21,000
Finished Goods Inventory 31
13,400
December
4) OtobiFurn’s overapplied/underapplied overhead = actual manufacturing overhead –
applied overhead
OtobiFurn’s overapplied/underapplied overhead = 252,000 – 250,000 = 2,000
Which mean OtobiFurn has underapplied manufacturing overhead because Actual
manufacturing overhead is bigger than applied overhead
5) If the amount of overapplied or underapplied overhead is not significant, the amount
is generally treated as a period cost and closed to the cost of goods sold. If the
amount is significant, the amount is sometimes prorated over the relevant accounts,
examples: work in process inventory, finished-goods inventory, and cost of goods
sold.
Q2 Cost behavior analysis
A & B
Plan A Plan B
0.4x 20,000 + 20x
i)
Q3 1.
a. FIFO Method
Units (in pounds) % of completed
Material Conversion
WIP in beginning (% to be complete) 4,000 0% 25%
Equivalent units 0 1,000
Unit started and transf out 11,000 (15000- 100% 100%
4000)
Equivalent units 11,000 11,000
Units in ending WIP 16000+4000-11000- 5,000 100% 20%
4000
Equivalent units 5,000 1,000
Total 20,000 16,000 13,000
Reconciliation: Units completed and transferred out + Units in Ending WIP > 15,000+5,000=
20,000
B.
Material cost
cost
2,000 10,000
10,000 51,000
4,000 20,600
Total 81,600
Conversion Costs
Direct labour cost 103,350
Direct department 52,000
cost
103350*40% 41,340
Total 196,690
Cost per equivalent unit Direct Material Conversion costs
Total of cost (November) a 81600 196690
Equivalent units b 16000 13000
Cost per equivalent a/b 5.10 15.13
units
C.
Cost of Chemgro transferred to the finishing Department
Equivalent Cost per Cost per Direct Conversion Total
unit equivalent equivalent Materials Cost
unit (Conversion)
(Materia)
Open, WIP 22,800 46,510
Equ units 1,000 15.13 15130
from Op WIP
Equ units 11,000 5.10 15.13 56100 166430
started and
transferred
out
Total 78900 228070 306970
(Transferred
out)
D.
Equivalent Cost per Cost per Direct Conversion total
Units equi unit equivalent Material Cost
(Materials) (Conversion)
Equivalent 5000 5.10 25500
units
started
Equivalent 1000 5.13 15130
units
started
Cost of 25500 15130 40630
Closing
WIP
2. Journal entries
a WIP 78,900
.
Raw material inventory 78,900
(To record issue of material)
b WIP 103,350
.
Direct labour 103,350
(To record direct labour cost)
c. WIP 93,340
Manufacturing overhead 93,340
(To record manufacturing overhead
applied)
d Finishing departments 306,970
.
WIP 306,970
(To record transferred of completed units)
Q4. A.
July August Septembe Octobe Quarter
r r
Budgeted unit 50,000 80,000 60,000 50,000 240,000
sales
B.
July Augus September October November Total
t
Budgeted sales revenue 50,000 80,000 60,000 50,000 28,000 240,000
Cost of goods sold at 70% 35,000 56,000 42,000 35,000 19,600 168,000
Add: closing inventory 64,800 53,600 48,000 35,680 202,080
Less: beginning inventory 48,000 64,800 53,600 48,000 35,680 250,080
(20000 + 80% of COGS)
Required purchases 51,800 44,800 36,400 118,68 251,680
0
C.
Operating expense budget July August September October Total
Fixed Expenses
Salaries expense 2,500 2,500 2,500 2,500 10,000
Rent expense 2,000 2,000 2,000 2,000 8,000
Dep. Expense 500 500 500 500 2,000
Insurance expense 200 200 200 200 800
Variable expense
Sale commissions (15% of sales) 7,500 12,000 9,000 4,200 32,700
Miscellaneous expense (5% of sales) 2,500 4,000 3,000 1,400 10,900
Operating expense budget 15,200 21,200 17,200 10,800 64,400
D.
July August September October Novembe Total
r
Budgeted sales revenue 50,00 80,000 60,000 50,000 28,000 268,000
0
Collection (same month) 30,00 48,000 36,000 30,000 16,800 160,800
60% 0
Collection (next month) 40% 16,00 20,000 32,000 24,000 20,000 112,000
0
Total schedule Collection 46,00 68,000 68,000 54,000 36,800 272,800
0
E.
July Augus September October Total
t
Merchandise Purchases Budget 51,800 44,800 36,400 118,680 251,680
50% on the same mth 25,900 22,400 18,200 59,340 125,840
50% on the next mth 16,800 25,900 22,400 18,200 83,300
Expected cash disbursements for 42,700 48,300 40,600 77,540 20,9140
Merchandise Purchases
F.
Budgeted cash disbursement for July August September October Quarter
operating expenses
Sales salary paid (on the month) 1,250 1,250 1,250 1,250 5,000
Sales salaries (on the next month) 1,250 1,250 1,250 3,750
Sale commission (on the same 3,750 6,000 4,500 3,750 18,000
month) 7500/2
(7500/2) (12000/2 (9000/2) (7500/2
) )
Sale commission (on the next month) 3,750 6,000 4,500 14,250
Payment of payable 4,250
Total 9,250 12,250 13,000 10,750 45,250
Rent expense 2,000 2,000 2,000 2,000 8,000
Miscellaneous expense 2,500 4,000 3,000 2,500 12,000
Budgeted cash disbursement for 13,750 18,250 18,000 15,250 65,250
operating expenses
G.
Whitewater Sporting Goods Store No. 18
Cash Budget
Cash Budget July August September October
Cash balance 15,00 11,550 11,233.33 18,883.33 15,000
beginning 0
Collection from 46,00 68,000 68,000 54,000 236,000
customers 0
Total cash 61,00 79,550 79,233.33 72,883.33 292,666.6
receipt 0 6
Less: Cash
Disbursements
Inventory 42,70 48,300 40,600 77,540 20,9140
0
Budgeted cash 13,75 18,250 18,000 15,250 65,250
disbursement 0
for operating
expenses
Truck 3,000
expenses
Total Cash 59,45 66,550 58,600 92,790 277,390
Disbursement 0
s
Ending cash 1,550 13,000 20,633.33 (19,906.67) 15,276.66
Balance
Min. cash 10,00 10,000 10,000 10,000
desired 0
Cash (8,450 3,000 10,633.33 (29,906.67)
efficiency )
(deficiency)
borrowing 10,00 10000
0
Principal - 16,66.67 16,66.67 16,66.67 5,000.01
repayments
(10,000/6)
Interest 100 83.33 66.67 251
(10,000x12%/1 (10,000- 8,333.33-
2) 1666.67 = 1666.67=
8333.33x12%/1 6666.66x12%/
2) 12
Total 10,00 (1,766.67) (1,750) (1,733.34) 4,749.99
0
Ending cash 11,55 11,233.33 18,883.33 (21,640.01) 20,026.65
balance 0
Q5
1. a Plantwide overhead rates:
Departments (numbers in thousands)
Componen
Molding t Assembly Total
Manufacturing departments:
Variable overhead $ 3,500 $10,000 $16,500 $30,000
Fixed overhead 17,500 6,200 6,100 29,800
Total manufacturing
department overhead $21,000 $16,200 $22,600 $59,800
Service departments:
Power 18,400
Maintenance 4,000
Total estimated overhead $82,200
Estimated direct-labor hours (DLH):
Molding 500
Component 2,000
Assembly 1,500
Total estimated
direct-labor hours 4,000
Plantwide overhead Rate = $82,200/4,000 = $20.55 per D/L hr
B. Overhead cost of Elite case = (4+3+2) * 20.55 = $184.95
2. Departmental overhead rates
a. 90/125 x 4000 = 2880
25/125 x 4000 = 800
10/125 x 4000 = 320
Service Manufacturing
Overhead costs Power Maintenance Molding Componen Assembly
t
18400 4000 21000 16200 22600
Allocation of maintenance (4000) 2880 800 320
costs
b. 360/800 x 6400 = 2880
320/800 x 6400 = 2560
120/800 x 6400 = 960
Allocation of power costs (6400) 2880 2560 960
Variable expenses
Fixed costs (12000) 12000 12000 12000
Total Allocated overhead costs $38760 $31560 $35880
c.
Total Allocated overhead costs $38760 $31560 $35880
/ machine hours 875 2000 1500
$44.30 $15.78 $23.92
3. 3. . hgyfgh
Overhead cost of Elite case =
(5 machine hrs * $44.30) + (3 labour hrs * $15.78) + (2 labour hrs
* $23.92) = $316.68
4
Dillon may use a plantwide overhead rate to assign overhead to
products as the overhead cost is lower than using the
departmental overhead method.
Q6
1. Profit= Unit CM x Q – Fixed expense
0 = 9- 5 x Q – 32,000
0= 4 x Q – 32,000
4 x Q = 32,000
32,000 / 4= 8,000 units in sales to break even
2. a.
Profit= Unit CM x Q – Fixed Expense
Profit= 9 – 5 x 15,000 – 32,000= 28,000
Profit= $28,000
B.
Profit= 9-5 x Q – 32,000
profit= 4 x Q – 32,000
4 x Q= 32,000
4/ Q= 32,000/4
= 8,000
3. 13-5 x 40,000- 29,000= 291,000
4. a. sales in units: target profit + Fixed cost/ (price per unit- Variable cost per unit)
28,000 + 58,000/ 13- 5 =
86,000/ 8=
unit sales= 10,750
b. 30,500 + 58,000/ 13- 5=
88,500/ 8=
unit sales= 11,062.50
c. Profit= 13-5 x 40,000- 58,000
Profit= 8 x 40,000- 58,000
Profit= 320,000- 58,000
Profit= $262,000
d. Profit= 13-5 x 40,000 x 0.20 – 58,000
profit= 326,000
E.
profit= 3-5 x 40,000- 58,000
Profit= 8 x 40,000- 58,000
Profit= 320,000- 58,000= $262,000
