Prepare the schedule of cost of goods sold for Nani Fashions

Assignment Help Managerial Accounting

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HI5017 Managerial Accounting Assignment - Holmes Institute, Australia

Assessment Task - Tutorial Questions

Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit.

Unit Learning Outcomes Assessed:

1. Critically evaluate the various approaches to performance measurement and control in various types of organisations, and devise and evaluate indicators of performance;

2. Demonstrate the need for a balance between financial and non-financial information in decision making, control and performance evaluation applications of management accounting;

3. Analyse a company's financial statements and/or management reports and identify the strengths and weaknesses of the company and articulate these to the various stakeholders.

Task - Your task is to answer a selection of tutorial questions and submit these answers in a single document. The questions to be answered are:

Question 1 - The following data refer to Nani's Fashions for the current year:

Sales Revenues $475,000

Work in process inventory, 31 December 15,000

Work in process inventory, 1 January 20,000

Selling and administrative expenses 75,000

Income tax expense 45,000

Purchase of raw materials 90,000

Raw materials inventory, 31 December 12,500

Raw material inventory. 1 January 20,000

Direct labour 100,000

Electricity: plant 20,000

Depreciation plant and equipment 30,000

Finished goods inventory, 31 December 25,000

Finished goods inventory, 1 January 10,000

Indirect material 5,000

Indirect labour 7,500

Other manufacturing overhead 40,000

Required -

a) Prepare the schedule of cost of goods manufactured for Nani's fashion.

b) Prepare the schedule of cost of goods sold for Nani's Fashions and explain the information provided by the schedule of cost of goods sold.

c) Prepare an income statement for the current year.

Question 2 - Brisbane Indoor Sports, a sporting complex, has opening hours that fluctuate from month to month. The electricity costs and hours of operation for past six months is listed below:

Month	Total hours of operation	Total electricity cost
January	650	$4,240
February	700	$4,400
March	800	$4,800
April	600	$4,200
May	550	$3,700
June	500	$3,600

Required -

a) Use the high-low method to estimate the cost behaviour for the complex's electricity costs, assuming that the variable costs vary in proportion to the hours of operation. Express the total cost behaviour in formula form (Y = a + bx). What is the variable electricity cost per hour of operation?

b) During July, the complex will open for 570 hours. Predict the complex's total electricity costs for July using the cost estimation method employed in above requirement a).

c) What is the main drawback of the high-low method of cost estimation?

Question 3 - Toys World started and finished job number A26, a batch of 1,000 cuddly koalas, during March 2020. The job required $4,850 of direct material and 32 hours of direct labour at $20 per hour. The predetermined overhead rate is $10.50 per direct labour hour. On 31st March, 900 of the cuddly koalas were shipped to a local toy shop.

Required -

a) Prepare journal entries to record the incurrence of production costs, completion of job number A26 and the shipment of 900 cuddly koalas to local toy shop.

b) Calculate the cost per cuddly koala for job number A26.

c) How might the managers at Toys World use this information?

Reference no: EM132503402

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