managerial acc assignment
TRANSCRIPT
Student: Dzung Phan – Class BA501
Roll number: B0010
INDIVIDUAL ASSIGNMENT
Managerial AccountingDillon Products manufactures various machined parts to customer specifications.
The company uses a job-order costing system and applies overhead cost to the
jobs on the basis of machine-hours. At the beginning of the year, it was
estimated that the company would work 240,000 machine-hours and incur
$4,800,000 in manufacturing overhead costs.
The company spent the entire month of January working on a large order for
16,000 custom-made machined parts. The company had no Work in process at
the beginning of January. Cost data related to January follow:
a. Raw materials purchases on account, $325,000
b. Raw materials requisitioned for production, $290,000 (80% direct materials
and 20% indirect materials).
c. Labor cost incurred in the factor, $180,000 (one-third direct labor and two-
thirds indirect labor)
d. Depreciation recorded on factory equipment, $75,000
e. Other manufacturing overhead cost was applied to production on the basis of
15,000 machine-hours actually worked during the month.
f. Manufacturing overhead cost was applied to production on the basis of
$15,000 machine-hours actually worked during one month.
g. The completed job was moved into the finished goods warehouse on January
31 to await delivery to the customer. (in computing the dollar amount for this
entry, remember that the cost of a completed job consists of direct materials,
direct labor, and applied overhead.
1. Prepare journal entries to record items (a) through (f) above [ignore item (g) for
the moment].
2. Prepare T-accounts for Manufacturing Overhead and Work on Process. Post
the relevant items from your journal entries to these T-accounts.
3. Prepare a journal entry for item (g) above.
4. Compute the unit product cost that will appear on the job cost sheet
Work:
1.
a.Raw Materials $325,000
Accounts Payable $325,000
b.Work in process $232,000
Manufacturing overhead $58,000
Raw Materials $290,000
c. Work in process $60,000
Manufacturing Overhead $120,000
Salaries and Wages Payable $180,000
d. Manufacturing Overhead $75,000
Accumulated Depreciation $75,000
e. Manufacturing Overhead $62,000
Accounts Payable $62,000
f. Work in process (15000 x ($4,800,000/240,000)) = $300,000
Applied Manufacturing overhead
Work in process Assume all are completed
2.
Manufacturing Overhead
b $58,000
c $120,000
d $75,000
e $62,000
f $300,000
Balance $15,000
Work in progress
b $232,000
c $60,000
f $300,000
Balance 592,000
Work in process Assume all are completed
3.
* Work in process (15000 x (4800000/240000)) = 300,000
Applied Manufacturing Overhead
Close the Manufacturing Overhead T account
* Actual Manufacturing Overhead = Indirect Material (58000) + indirect labour
(120000) + depr (75000) + other Manufacturing overhead (62000)
= Actual Manufacturing Overhead = 315,000
* Applied Manufacturing Overhead = 300,000
=> Unapplied manufacturing overhead = 315,000 - 300,000 = $15,000
So, under applied Manufacturing overhead needs to be booked
Under applied Manufacturing overhead $ 15,000
Manufacturing overhead $15,000
Close Under Applied Manufacturing overhead to COGS $15,000
Cost of good sold under applied $15,000
Manufacturing overhead $15,000
4 .Product cost/ unit =$ 592,000/16000 = $37