The company Aldebaran manufactures various custom-made products. The company uses a job- costing system based on...
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The company Aldebaran manufactures various custom-made products. The company uses a job- costing system based on a normal costing approach with just one cost pool and allocate the indirect manufacturing cost on the basis of direct labour cost (indirect costs are also called overhead). Aldebaran started manufacturing in year 2021 (all amounts are in DKK): Table 1: Use of materials, labour and manufacturing indirect cost in 2021: Job no. Materials Dir. Labour + indirect cost Status 31-12-2021 211 650,000 840,000 Sold and delivered 212 625,000 875,000 213 730,000 720,000 Sold and delivered Sold and delivered Finished 214 640,000 660,000 215 310,000 300,000 Work-in-process Budget information for year 2022 (all amounts are in DKK): Table 2: Budget for manufacturing activity in year 2022: Materials Direct Labour cost 2,800,000 2,000,000 The activity in year 2022 (all amounts are in DKK): Table 3: Jobs handled and use of materials and labour in 2022: Job no. Materials Direct Labour cost 214 215 221 222 223 Item: Status 31-12-2022 Sold and delivered Sold and delivered Sold and delivered Finished Work-in-process Please notice status of the jobs in tables. Aldebaran adjusts all under- and overapplied overhead to cost of goods sold at year end. Actual manufacturing indirect cost for year 2022: 3,101,400 DKK. Questions: 1.1. Calculate the predetermined overhead application rate for 2022. 1.2. Calculate the cost of each of the jobs handled in 2022 (the total value of the orders had there not been any sales in 2022). www. 340,000 970,000 850,000 580,000 Manufacturing indirect cost 2,600,000 240,000 650,000 850,000 220,000 1.3. Determine the (2022) ending values of Work-in-process and Finished goods. 1.4. Calculate the allocated manufacturing indirect cost in 2022 and the under- or overallocated manufacturing indirect cost. 1.5. Calculate the cost of goods sold (COGS) in 2022. 1.6. Pricing the jobs is done using a 20% markup on total manufacturing cost of the jobs sold. Inventory is valued at total manufacturing cost. Determine the sales revenue in 2022. 1.7. Present calculation of the gross margin in 2022 (should be 500,000 DKK). 1.8. Explain the reason that gross margin is "only" 500,000 DKK. Management expected a gross margin of 20% of the manufacturing cost: 0,2*7,400,000 = 1,480,000 DKK. The company Aldebaran manufactures various custom-made products. The company uses a job- costing system based on a normal costing approach with just one cost pool and allocate the indirect manufacturing cost on the basis of direct labour cost (indirect costs are also called overhead). Aldebaran started manufacturing in year 2021 (all amounts are in DKK): Table 1: Use of materials, labour and manufacturing indirect cost in 2021: Job no. Materials Dir. Labour + indirect cost Status 31-12-2021 211 650,000 840,000 Sold and delivered 212 625,000 875,000 213 730,000 720,000 Sold and delivered Sold and delivered Finished 214 640,000 660,000 215 310,000 300,000 Work-in-process Budget information for year 2022 (all amounts are in DKK): Table 2: Budget for manufacturing activity in year 2022: Materials Direct Labour cost 2,800,000 2,000,000 The activity in year 2022 (all amounts are in DKK): Table 3: Jobs handled and use of materials and labour in 2022: Job no. Materials Direct Labour cost 214 215 221 222 223 Item: Status 31-12-2022 Sold and delivered Sold and delivered Sold and delivered Finished Work-in-process Please notice status of the jobs in tables. Aldebaran adjusts all under- and overapplied overhead to cost of goods sold at year end. Actual manufacturing indirect cost for year 2022: 3,101,400 DKK. Questions: 1.1. Calculate the predetermined overhead application rate for 2022. 1.2. Calculate the cost of each of the jobs handled in 2022 (the total value of the orders had there not been any sales in 2022). www. 340,000 970,000 850,000 580,000 Manufacturing indirect cost 2,600,000 240,000 650,000 850,000 220,000 1.3. Determine the (2022) ending values of Work-in-process and Finished goods. 1.4. Calculate the allocated manufacturing indirect cost in 2022 and the under- or overallocated manufacturing indirect cost. 1.5. Calculate the cost of goods sold (COGS) in 2022. 1.6. Pricing the jobs is done using a 20% markup on total manufacturing cost of the jobs sold. Inventory is valued at total manufacturing cost. Determine the sales revenue in 2022. 1.7. Present calculation of the gross margin in 2022 (should be 500,000 DKK). 1.8. Explain the reason that gross margin is "only" 500,000 DKK. Management expected a gross margin of 20% of the manufacturing cost: 0,2*7,400,000 = 1,480,000 DKK.
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Managerial Accounting A Focus on Ethical Decision Making
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5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
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