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Category > Accounting Posted 21 Apr 2017 My Price 20.00

ACCY211: Management Accounting II

Subject: ACCY211: Management Accounting II
Type of assessment task: Assignment 2
Due date: Week 8 in your enrolled tutorial class.
40 marks QUESTION 1 Agrava Ltd. provides the costs for its single product using process costing. Direct material is added at the
beginning of the production process, and conversion activity occurs uniformly throughout the process.
Percent Complete
Work in process, August 1
Units started during August
Units completed and transferred out
during August
Work in process, August 31 Work in process, August 1
Costs incurred during August
Total costs to account for Physical units
50,000
80,000
100,000 Materials
100% Conversion
80% 30,000 100% 30% Total
$490,000
$990,000
$1,480,000 Direct Materials
$130,000
$260,000
$390,000 Conversion
$360,000
$730,000
$1,090,000 Required:
Using weighted-average process costing to complete the following requirements: (a) Determine the equivalent units for August. (10 marks) (b) Compute the costs per equivalent unit. (10 marks) (c) Compute the cost of goods completed and transferred out during August ( 5 marks) (d) Compute the cost remaining in the work in process inventory on August 31. (10 marks) (e) Prepare a journal entry to record the transfer of the cost of goods completed and
transferred out. ( 5 marks) 40 marks QUESTION 2 Quintric Ltd. produces two types of fine wool coats that are classified as Executive and Elite coat. Quintric’s
currently using a simple job-costing system that has two direct-cost categories (direct materials and direct
labour) and a single indirect-cost pool with indirect cost allocation based on machine-hours. For 2016, Quintric’s
budget includes estimated manufacturing overhead costs of $200,000 and 8,000 machine hours. Quintric
collected the following information for 2016. Number of coats
Machine hours per coat
Price per coat
Cost of materials per coat
Direct labour costs per coat Executive coat
400 coats
10
$700
$200
$180 Elite coat
200 coats
10
$1,200
$ 300
$ 410 Required:
(a) Using the simple costing system, calculate the product cost per unit for the Executive and
Elite coat. (10 marks) (b) Quintric Ltd. incurred actual total manufacturing costs of $202,000 and 8,000 total
machine hours during the year. Determine the amount of under applied or over applied
manufacturing overhead for the period and prepare a journal entry to close any balance in
the manufacturing overhead account assuming the under/over applied overhead amount
is insignificant. (5 marks) (c) Quintric is concerned about the accuracy of the costs assigned to the Executive and Elite
coat and therefore is planning to implement an activity-based costing (ABC) system.
Quintric’s ABC system would have the same direct-cost categories as its simple costing
system. However, instead of a single indirect-cost pool there would now be three
categories (design, setup and printing machine operations) for assigning indirect costs. To
see how activity-based costing would affect the costs of the Executive coat or Elite coat,
the following information is collected for an analysis.
Activity
Costs
Cost Allocation
Quantity of Cost Allocation Base
Base
Executive coat
Elite coat
Design
$80,000
Design hours
800 design hours
3,200 design hours
Setups
45,000 Number of setups
10 setups
40 setups
Machine
75,000
Machine hours
3,000 machine hours 2,000 machine hours
operations
$200,000 (d) Using the activity based costing system, calculate the estimated product cost per unit for
the Executive and Elite coat. (15 marks) Compare the costs of the Executive coat and Elite coat under the simple and activity
based costing systems. Explain why the simple and activity based costing systems differ
in the cost of the Executive and Elite coat. (10 marks) 20 marks QUESTION 3
Axioma Ltd has the following budgeted sales for the next six-month period:
Month
January
February
March
April
May
June Unit Sales
90,000
120,000
210,000
150,000
180,000
120,000 Axioma Ltd. sells a single product at a price of $50 per unit. There were 24,000 units of finished goods in
inventory at the beginning of February. Axioma Ltd.’s policy is to keep an inventory of finished goods that is
equal to 20% of the unit sales for the next month.
Five kilograms of materials are required for each unit of finished goods produced. Each kilogram of
material costs $8. Inventory levels for materials are equal to 20% of the production needs for the next month.
Material inventory at the beginning of February was $1,104,000 (138,000 kilograms). Required:
(a)
Prepare sales budgets in units and dollars for February and March
(b)
Prepare production budgets in units for February and March
(c)
Prepare direct materials usage budget in kilograms and dollars for February
(d)
Prepare direct materials purchases budgets (in kilograms and dollars) for February (4 marks)
(8 marks)
(4 marks)
(4 marks)

 

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Status NEW Posted 21 Apr 2017 01:04 AM My Price 20.00

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