Reference no: EM133064257
Product Costing Systems - Job Costing
Question 1: The following information relates to the Moonie Park Manufacturing Company for the year 2011.
Budgeted level of production was 29,000 machine hours Budgeted manufacturing overhead was $174,000
Actual manufacturing overhead for the year was $175,000
Actual machine hours used were 30,000
Assume the machine hour is the cost driver of MOH, calculate the overhead costs applied to the product.
Question 2:
Company B allocates overhead costs on the basis of the number of machine hours. Details concerning manufacturing overhead for the year are as follows:
Budgeted manufacturing overhead $420 000
Actual manufacturing overhead $480 000
Budgeted machine hours 30 000
Actual machine hours 31 000
Determine the extent to which overhead is under/ over allocated for the year. Provide the adjusting journal entry to account for the over or under applied amount of overhead.
Question 3:
Ranjith construction builds residential houses. It uses job-costing system with one indirect cost pool (building support or manufacturing overhead). Direct labour-hours is the allocation base for building support costs.
|
Budget for 2011 |
Actual results for 2011 |
Building support costs |
$8 800 000 |
$7 380 000 |
Direct labour-hours |
160 000 |
164 000 |
|
|
|
Two builds were started and completed during 2011 |
|
|
|
L Model house |
M Model house |
Direct material costs |
$ 106 450 |
$ 127 604 |
Direct labour costs |
$ 36 276 |
$ 41 410 |
Direct labour-hours |
900 |
1010 |
Required
1. Compute applied MOH costs for each model.
2. What are the job costs of L model house and M model house?
3. Assume the actual MOH costs incurred for L and M models were $40500 and $45450 respectively. Calculate the under/over applied MOH for each model house and provide the adjusting journal entry.
Question 4:
The following information is provided in relation to Shanker Corporation for January.
(1) Opening balances:
Raw materials inventory $10,000 Work in process inventory $24,000 Finished goods inventory $53,000
(2) Closing balances:
Work in process inventory $32,000
Finished goods inventory $26,000
(3) Raw materials were purchased on credit for $63,000.
(4) Direct labour costs of $75,000 were incurred at a rate of $15 per hour.
(5) Manufacturing overhead was applied at a rate of $13.20 per direct labour hour.
(6) Actual manufacturing overhead costs incurred during January were $71,000 (including $50000 unpaid indirect labour and $21000 office supplies inventory).
(7) Jobs were sold on credit during the month for $345,000. The cost of goods sold (before any adjustment was made) during the month was $222,000.
Complete the relevant T- accounts (provided on next page) to show the flow of costs.