Question 1

Corporate Construction Limited was awarded Contract #1195 for $2,000,000. The contract is still in progress but is at a stage where profit can be recorded. The following information was extracted from the company's books in respect of the contract as at 30^thSeptember 2014:

Details

Amount ($)

Materials purchased

64,000

Materials issued from Stores

200,000

Salaries and Wages

280,000

Sundry expense

30,000

Overhead expense

10,000

Plant issued

32,000

Materials returned to Stores

12,000

Materials returned to suppliers

8,000

The following balances relating to the contract for the year ended 30^thSeptember, 2014 were also available:

• Work certified =$1,400,000
• Work uncertified= $16,000
• Material on site = $12,000
• The contractor received payments totaling $1,050,000.

Required:

1. Need a Contract Account for the period ended 30^thSeptember, 2014).
2. Need Contractee Account for the period ended 30^thSeptember, 2014.

Question 2

On January, 2020 the following Standard Cost Card relating to the product Winnex was extracted from the records of Tremor Manufacturers Ltd.

Standard Cost Card

Details

$

Direct materials 3 litres @ $300

900

Direct labour 5 hrs @ $100

500

Total cost

1400

Actual results for the period:

Production 8,000 units

Direct raw materials purchased 26,000 litres at a cost of $9,100,000.

Opening stock of direct raw materials 700 litres

Closing stock of direct raw materials 500 litres

Direct wages $4,560,000 for 38,000 hours

Required:

(a)Calculate direct raw material price variance.

(b)Calculate direct raw material usage variance.

(c)Calculate direct labour rate variance.

(d)Calculate direct labour efficiency variance.

Question 3

Yello Distributors is in the process of planning its cash needs for the period ended June 30, 2020. The company requires your service to assist them in preparing a cash budget. The following budgeted information is presented to assist in the preparation.

Month

Budgeted sales

$

Budgeted purchases

$

January

4,000,000

3,000,000

February

3,000,000

1,500,000

March

5,000,000

2,000,000

April

5,500,000

2,500,000

May

3,500,000

3,000,000

June

6,500,000

1,800,000

July

7,000,000

3,000,000

Notes:

1.The company's sales collection records indicates the following:

a)50%of sales collected in the month of sale

b)40% collected in the month following sale

c)10 collected two months following sale

2.In relation to purchases, the company's payment pattern is as follows:

a)60% paid with cash at the time of purchase

b)20% paid the month after purchase

c)20% paid two months after purchase

Required:

a)Prepare the cash collection schedule for the first quarter ending June 2020 showing a total column, also show separately cash and credit collections.

b)Do a payment schedule to creditors for the same period clearly showing total payments for the quarter. Show cash payments and payments on credit separately.

Question 4

Fateful Morn is a jobbing company. On 1 June 2020, there was one uncompleted job in the factory. The job card for this work is summarized as follows:

Job Card, Job No. 6832

Cost to date:

$

Direct materials

700

Direct labour (100 hours)

400

Factory overhead ($5 per direct labour hour)

600

Factory Cost to date

1,700

During June, three new jobs were started in the factory, and costs of production were as follows:

Direct Materials

$

Issued to:

Job 6832

6,000

Job 6833

9,000

Job 6834

8,000

Material transfers

$

Job 6834 to job 6833

900

Job 6832 to Job 6834

1,500

Materials returned to store

$

From Job 6832

1,200

Direct labour hours recorded

Job 6832

250 hrs

Job 6833

300 hrs

Job 6834

480 hrs

The cost of labour hours during June 2020 was $4 per hour, and production overhead is absorbed at the rate of $5 per direct labour hour. Completed jobs were delivered to customers as soon as they were completed, and the invoiced amounts were as follows:

Job 6832

$10,000

Job 6834

$24,000

Administration and marketing overheads are added to the cost of sales at the rate of 20% of factory cost.

Required:

a.Make a the summarized job costs cards for each job, and calculate the profit on each completed job.

Answer rating: 100% (QA)

Question 1 Corporate Construction Limited Contract Account For the period ended 30th September 2014 ... View the full answer