Kenos Pte Ltd manufactures all types of custom-made furniture. It uses a job-costing system and applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totalled $2,400,000. It has a maximum capacity of 320,000 machine hours. However, it is budgeted to be able to use 75% of this capacity during this period. On 31 July, Kenos Pte Ltd has the following balances: Work in process inventory -Job 123 -Job 124 Raw materials inventory $13,360 Finished inventory -Job 122 $23,000 In August, the following occurred: $18,000 $8,620 (i)Raw materials purchased on credit (ii) Raw materials requisitions -Job number 123 -Job number 124 -Job number 125 -Indirect materials (used in production) (iii)Machine hours, direct labour hours and wages for factory employees Job number Machine hours Labour hours 123 2,400 2,320 124 880 720 125 3,900 2,860 Indirect labour 600 (iv)Other overhead incurred: (v) (vi) Required: Depreciation (machineries) Depreciation (delivery vans) - Other factory costs Salaries (production) Salaries (sales and administration) (ii) (iii) (iv) Other selling and administration costs Spoilage & reworked costs -job number 123 -job number 124 -job number 125 (a) Calculate the following: (0) $4,840 $1,020 $600 $2,480 $600 Raw materials inventory as of 31 August. Wages $24,480 $8,640 Normal spoilage amounting to $70 and abnormal spoilage of $30 were incurred Rework cost of $52 was incurred. Job number 123 and Job number 124 were completed during the month. $40,100 $5,880 (vii) Job number 122 was sold for cash at a mark-up of 30% on cost while Job number 123 was sold on credit at a price that allowed the company to earn a gross profit margin of 20%. $4,000 $400 Normal spoilage with estimated disposal selling price of $320 was incurred. Work in process as of 31 August. Finished goods inventory as of 31 August. Selling price for Job number 122 and Job 123. $10,000 $7,000 $15,600 $9,600
Kenos Pte Ltd manufactures all types of custom-made furniture. It uses a job-costing system and applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totalled $2,400,000. It has a maximum capacity of 320,000 machine hours. However, it is budgeted to be able to use 75% of this capacity during this period. On 31 July, Kenos Pte Ltd has the following balances: Work in process inventory -Job 123 -Job 124 Raw materials inventory $13,360 Finished inventory -Job 122 $23,000 In August, the following occurred: $18,000 $8,620 (i)Raw materials purchased on credit (ii) Raw materials requisitions -Job number 123 -Job number 124 -Job number 125 -Indirect materials (used in production) (iii)Machine hours, direct labour hours and wages for factory employees Job number Machine hours Labour hours 123 2,400 2,320 124 880 720 125 3,900 2,860 Indirect labour 600 (iv)Other overhead incurred: (v) (vi) Required: Depreciation (machineries) Depreciation (delivery vans) - Other factory costs Salaries (production) Salaries (sales and administration) (ii) (iii) (iv) Other selling and administration costs Spoilage & reworked costs -job number 123 -job number 124 -job number 125 (a) Calculate the following: (0) $4,840 $1,020 $600 $2,480 $600 Raw materials inventory as of 31 August. Wages $24,480 $8,640 Normal spoilage amounting to $70 and abnormal spoilage of $30 were incurred Rework cost of $52 was incurred. Job number 123 and Job number 124 were completed during the month. $40,100 $5,880 (vii) Job number 122 was sold for cash at a mark-up of 30% on cost while Job number 123 was sold on credit at a price that allowed the company to earn a gross profit margin of 20%. $4,000 $400 Normal spoilage with estimated disposal selling price of $320 was incurred. Work in process as of 31 August. Finished goods inventory as of 31 August. Selling price for Job number 122 and Job 123. $10,000 $7,000 $15,600 $9,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Kenos Pte Ltd manufactures all types of custom-made furniture. It uses a job-costing system and
applies manufacturing overhead on the basis of machine hours. The company's manufacturing
overhead budget for the year totalled $2,400,000. It has a maximum capacity of 320,000 machine
hours. However, it is budgeted to be able to use 75% of this capacity during this period.
On 31 July, Kenos Pte Ltd has the following balances:
Work in process inventory
-Job 123
-Job 124
Raw materials inventory $13,360
Finished inventory
-Job 122
$18,000
$8,620
In August, the following occurred:
(i)Raw materials purchased on credit
(ii) Raw materials requisitions
$23,000
(v)
Job number
123
124
125
Indirect labour
(vi)
-Job number 123
-Job number 124
-Job number 125
-Indirect materials (used in production)
(iii)Machine hours, direct labour hours and wages for factory employees
(iv)Other overhead incurred:
Required:
Depreciation (machineries)
Depreciation (delivery vans)
Machine hours Labour hours
2,400
2,320
880
720
3,900
2,860
600
Salaries (production)
Salaries (sales and administration)
Other factory costs
Other selling and administration costs
Spoilage & reworked costs
-job number 123
-job number 124
$4,840
-job number 125
$1,020
$600
$2,480
$600
(a) Calculate the following:
(1)
(ii)
(iii)
(iv)
Wages
$24,480
$8,640
$40,100
$5,880
$4,000
$400
$10,000
$7,000
$15,600
$9,600
Normal spoilage with estimated disposal selling price of
$320 was incurred.
Raw materials inventory as of 31 August.
Work in process as of 31 August.
Finished goods inventory as of 31 August.
Selling price for Job number 122 and Job 123.
Normal spoilage amounting to $70 and abnormal spoilage
of $30 were incurred
Rework cost of $52 was incurred.
Job number 123 and Job number 124 were completed during the month.
(vii) Job number 122 was sold for cash at a mark-up of 30% on cost while Job number 123
was sold on credit at a price that allowed the company to earn a gross profit margin of
20%.
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