Question 1: Greek group of companies submitted following information on June 30, 2019. Accounts $ Sales 650,000
Question:
Question 1: Greek group of companies submitted following information on June 30, 2019.
Accounts | $ |
Sales | 650,000 |
Direct Labor | 70,000 |
Purchase return and allowance | 4,500 |
Applied MOH | 39,000 |
Freight in | 1,000 |
Work-in process, Jul 01, 2018 | 30,000 |
Work-in process, Jun 30, 2019 | 20,000 |
Purchases | 105,000 |
Raw material inventory, Jul 1, 2018 | 35,000 |
Raw material inventory, Jun 30, 2019 | 25,000 |
Salaries expense (50% admin, 50% Marketing) | 15,000 |
Advertisement expense | 10,000 |
Rent Expense (30% admin, 70% Marketing) | 20,000 |
Depreciation of office vehicles | 7,500 |
Finished goods inventory, Jul 1, 2018 | 20,000 |
Finished goods inventory, Jun 30, 2019 | 30,000 |
Purchase discount | 2,000 |
Required:
- Prepare Cost of goods sold statement.
- Prepare income statement.
(07 Marks)
Question 2: The Marketing department of Smith Corporation Inc. has submitted the following budgeted production units for the upcoming fiscal year;
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
Budgeted Sale Units | 19,000 | 22,000 | 25,000 | 21,000 |
The selling price of the company’s product is $ 12.00 per unit (All sales are done on credit). Management expects to collect 75% of sales in the quarter in which the sales are made and 25% in the following quarter. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $ 83,000.
The company expects to start the first quarter with 2,500 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,800 units.
Each unit requires 0.80 direct labor-hours and direct labor-hour workers are paid $ 18 per hour.
Requirement
- A sales budget, including a schedule of expected cash collections.
- A production budget
- Question 4: Romania Corporation has provided the following data from its activity-based costing system:
Overheads costs
Wages and Salaries $ 400,000 Other Overheads Costs 150,000 Total Overheads Costs $ 550,000 Activity cost pool
Activity Measures
Total Activity per year
Supporting Direct Labor
Number of direct labor hours
15,000 DLHs
Order Processing
Number of customers orders
350 orders
Customer support
Number of customers
150 Customers
Others
Sustaining Activities
Not Applicable
Distribution of Resource Consumption Across Activities
Supporting Direct Labor
Order Processing
Customer Support
Other
Total
Wages and salaries
50%
30%
10%
10%
100%
Other overhead costs
40%
20%
10%
30%
100%
REQUIREMENT
- Prepare the second stage of allocation of costs to the activity cost pools.
- Compute the activity rates for the activity cost pools.
- Prepare a report showing the overhead costs for the order from a customer Shenzhen Enterprises who has placed two orders for 34 units in a year. Total 68 direct labor hours consumed
- The revenue from a customer Shenzhen Enterprises was $ 19,000. Prepare a report showing the customer margin from this job.
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren