Reference no: EM132635090 , Length: word count:1500

Case study - report and analysis

Purpose: This assessment is designed to allow students to demonstrate their ability to analyse given financial information relating to a management accounting problem and present their findings and analyse the information as it applies to accounting concepts It relates to learning outcomes a b c and d

Task details Optic Vision Pty Ltd, a manufacturer of fibre-optic communications equipment uses a job costing system Since the production process is heavily automated manufacturing overhead is applied on the basis of machine hours using a predetermined overhead rate Estimated manufacturing overhead costs of $3 600 000 and an estimated cost driver level of 80 000 machine hours

Operations for the current year have been completed. and all the accounting entries have been made for the year except the application of manufacturing overhead to the jobs worked on during December the transfer of costs from work in process to finished goods for the jobs completed in December. and the transfer of costs from finished goods to cost of goods sold for the jobs that have been sold during December.

Summarised data as at 30 November and for December are presented in the following tables Job numbers T11-007 N11-013 and N11-015 were completed during December All completed jobs except job number N11-013 had been turned over to customers by the close of business on 31 December

Required:

1. Calculate manufacturing overhead rate per machine hour,

2. How much manufacturing overhead would Optic Vision have applied to jobs to 30 November?

3. How much manufacturing overhead would be applied to jobs by Optic Vision during December?

4. Determine the amount by which the manufacturing overhead is overapplied or underapphed as at 31 December

5. Determine the balance in Optic Vision's finished goods inventory account on 31 December.

6. Prepare a schedule of cost of goods manufactured for Optic Vision 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.).

7. How much total cost of completed jobs T11-007, N11-013 and N11-015?

8. Management accountant of Optic Vision, Sam has noticed that some competitors have adopted ABC method for manufacturing overhead cost. Sam believes Optic Vision should also change Its costing
method. Provide support for Sam's proposed change.

Research requirements: Students need to support their analyses with references from the text and a minimum of six (6) suitable, reliable and academically acceptable sources. Check with your tutor if you are unsure of the validity of sources.

Attachment:- case.rar