Assignment Question(s): (5.0 Marks)
Assignment 1 acct 322
ABC Corporation applies job order costing system and the information drawn from its costing records as follows 🙁 2 Marks)
|
Particular |
Job 100 |
Job 200 |
Total |
|
Direct material per unit |
50 SR |
75 SR |
– |
|
Direct labour rate per hour |
15 SR |
20 SR |
– |
|
Direct labour hour per unit |
2 |
4 |
– |
|
Yearly estimated direct labour hour |
– |
– |
20,000 hours |
|
Yearly estimated fixes overhead |
– |
– |
100,000 SR |
|
Overhead variable cost per direct hour |
– |
– |
5 SR |
|
Yearly estimated machine hours |
5,000 hours |
During January 2021, the corporation produced and sold 3000 units from job order no. 100 and 3500 units from job order no. 200 respectively. The corporation uses normal costing system that charge applied overhead to jobs.
Required:
1-Compute the pre determine overhead using direct labour hour as accost driver.
2-Compute total product costs for the two jobs.
3-Pass journal entries to record cost flow, namely direct material, direct labour and overhead to work in process inventory.
Answer:
2. Analyse the following costs into product costs and period costs using check mark in the column (1.5 Marks)
|
Costs |
Product costs |
Period costs |
|
Direct labour |
||
|
Direct material |
||
|
Depreciation on manufacturing equipment |
||
|
Advertising expense |
||
|
Research and development expense |
||
|
Wages for administration |
||
|
Depreciation for vehicles used in sales |
||
|
Factory utilities. |
||
|
Rent of the production building |
||
|
Salaries of maintenance personnel. |
||
|
Office depreciation |
||
|
Interest expense on a company’s debt |
Answer:
Q3. The following information drawn from ABC Corporation about maintenance costs in 2020. (1.5 Marks)
|
Month |
Total maintenance costs (SR) |
Maintenance hours |
|
July |
75,000 |
5,000 |
|
August |
81,000 |
5,500 |
|
September |
63,000 |
4,000 |
|
October |
51,000 |
3,000 |
|
November |
87,000 |
6,000 |
|
December |
84,600 |
5,800 |
Required:
1.Estimate the cost function for ABC using the high- low method.
2.Predict maintenance costs if maintenance hours are 7,000 hours in January 2021.
Answer:
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