Question Details

(Solved) 1 You are required to finish each of these questions, total 40 marks. Question 1: Support department cost allocation; plantwide versus departmental...


the question is about management accounting and all question in the file

1 You are required to finish each of these questions, total 40 marks.
Please give the solutions in detail, show calculations and submit
the solutions to Moodle using a single file, it can be Excel format,
Word format or PDF format, no requirement on word limits, if use
any references, please refer to Harvard style.
Question 1: Support department cost allocation; plantwide versus
departmental overhead rates; product costing; cost drivers:
manufacturer (15 marks)
Rising Fast Pty Ltd manufactures a complete line of fibreglass attaché cases and
suitcases. The firm has three manufacturing departments: Moulding, Component
and Assembly. There are also two support departments: Power and Maintenance.
The sides of the cases are manufactured in the Moulding Department. The
frames, hinges and locks are manufactured in the Component Department. The
cases are completed in the Assembly Department. Varying amounts of materials
and time are required to manufacture each type of case.
Rising Fast has always used a plantwide overhead rate. Direct labour hours are
used to assign overhead to products. The predetermined overhead rate is
calculated by dividing the company's total estimated overhead by the total
estimated direct labour hours to be worked in the three manufacturing
departments.
Liam Bolt, manager of cost accounting, has recommended that Rising Fast use
departmental overhead rates. The planned operating costs and expected levels
of activity for the coming year have been developed by Bolt and are presented
by department in the following schedules. (All numbers are in thousands.) Manufacturing
departments
Mould
ing Compo
nent Assem
bly Direct labour hours 500 2 000 1 500 Machine hours 875 125 0 Direct material $12
400 $30 000 $ 1
250 Direct labour 3 500 20 000 12 000 Manufacturing overhead  21
000  16 200  22
600 Total departmental costs $36
900 $66 200 $35
850 Departmental activity
measures: Departmental costs: 2 Use of support
departments
Mould
ing Compo
nent Assem
bly 90 25 10 360 320 120 Maintenance:
Estimated usage in labour
hours for the coming year Power (in kilowatt hours): Estimated usage for the
coming year Support departments
Power Maintenance Departmental activity
measures:
Estimated usage for the coming 800
year
kWh 125 labour
hours Departmental costs:
Materials and supplies
(variable) $ 5 000 $1 500 Variable labour 1 400 2 250 Fixed overhead  12000  250 Total support department costs $18
400 $4 000 Required:
1 ( Calculate the plantwide overhead rate for Rising Fast for the coming year
a using the same method as used in the past.
)
( Estimate the overhead cost of an Elite attaché case that requires 4 direct
b labour hours and 5 machine hours in the Moulding Department, 3 direct
) labour hours in the Component Department and 2 direct labour hours in the
Assembly Department.
2 Liam Bolt has been asked to develop departmental overhead rates for
comparison with the plantwide rate. The following steps are to be followed in
developing the departmental rates:
3 ( Allocate the total Maintenance Department costs to the three
a manufacturing departments, using the direct method.
)
( Allocate the Power Department costs to the three manufacturing
b departments, using the direct method.
)
(c Calculate departmental overhead rates for the three manufacturing
) departments, using a machine hour cost driver for the Moulding
Department and a direct labour hour cost driver for the Component and
Assembly departments.
3 Estimate the overhead cost of the Elite attaché case using the departmental
overhead rates.
4 Should Rising Fast use a plantwide rate or departmental rates to assign
overhead to products? Explain your answer. Question 2: Product cost classification: manufacturer (10 Marks)
The following cost data for the current year relate to Heartstrings Pty Ltd, a
greetings card manufacturer:
Service department costs1 $ 50 000 Direct labour: wages 242 500 Direct labour: on-costs 47 500 Indirect labour: on-costs 15 000 On-costs for production supervisor 4 500 Administrative costs 75 000 Rental of office space for sales personnel2
Sales commissions
Product promotion costs
Direct material
Advertising expense 7 500 2 500
5 000
1 050 000
49 500 Depreciation on factory building 57 500 Cost of finished goods inventory at year end 57 500
Indirect labour: wages 70 000 Production supervisor's salary 22 500 Total overtime premiums paid 27 500 Cost of idle time: production employees3 20 000 Required:
Calculate each of the following costs for the year:
1 Total prime costs. 2 Total manufacturing overhead costs. 3 Total conversion costs. 4 Total product costs (for external reporting purposes).
4 5 Total period costs. Question 3: Cost flows in a job costing system; schedule of cost of
goods manufactured; automation: manufacturer (15 marks)
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. The current annual rate of $45
per machine hour is based on 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 table. 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.
Work in Process: December activity
Balance
Direc
Job
30
t
numbe
Novemb
mate
rs
er
rial
T11$261 000
 $ 4
007
500
N11165 000
 12
013
000
N11      0
 76
015
800
D12      0
113
002
700
D12    0
  78
003
000
Totals
$426 000
$285
000
Operating
Activity to 30
activity
November
Actual
manufacturing
overhead
incurred:
Indirect material
$375 000
Indirect labour
1 035 000
Utilities
735 000
Depreciation
 1 155 000
Total overhead
$3 300 000
Other items:
Raw material
$2 895 000
purchases*
Direct labour
$2 535 000
cost
Machine hours
73 000
Account
balances at
beginning 1
January: Dire
ct
Machi
labo
ne
ur
hours
$13
300
500
 36
1 000
000
 80
1 400
100
 60
2 500
000
  50
  800
400
$240
6 000
000
December
activity $27 000
90 000
66 000
 105 000
$288 000
$294 000
$240 000
6 000 5 Raw material
$315 000
inventory*
Work in process
180 000
inventory
Finished goods
375 000
inventory
Required:
1
How much manufacturing overhead would Vision have applied to jobs to
30 November?
2
How much manufacturing overhead would be applied to jobs by Vision
during December?
3
Determine the amount by which the manufacturing overhead is
overapplied or underapplied as at 31 December.
4
Determine the balance in Vision's finished goods inventory account on
31 December.
5
Prepare a schedule of cost of goods manufactured for Vision Pty Ltd for
the year. (Hint: In calculating the cost of direct material used, remember
that Vision includes both direct and indirect material in its raw material
inventory account.) 6

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 05, 2019

PRICE: $15

Solution~000200223122.zip (25.37 KB)

Buy this answer for only: $18

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free solution (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 05, 2019

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now