MAF Group Assignments

Student Student ID

Cvetanka 19736222
Baltovska 

Nadeen Razko  18953871

Micheil Alhakim 19455727

 Tuan Kiet Huynh 17475769

Q1.

1) A job costing system is appropriate where each product, batch of products or order is

different, and costs can be readily identified with that specific product, batch, or

order.

2)

PS812 – Printer Stand    

O/B November 30   250,000

Direct Materials 124,000  

Purchased Parts 87,000  

Direct Labor 200,500  

Manufacturing 97,500 509,000

Overhead

C/B December 31   759,000

The working in process inventory account balance as at 31 December is $759,000

 3)

  Chairs units

Finished Goods Inventory 30 19,400

November

Units completed in December 15,000

Unit available for sale 34,000

Units shipped in December 21,000

Finished Goods Inventory 31

13,400
December

4) OtobiFurn’s overapplied/underapplied overhead = actual manufacturing overhead –

applied overhead

OtobiFurn’s overapplied/underapplied overhead = 252,000 – 250,000 = 2,000

Which mean OtobiFurn has underapplied manufacturing overhead because Actual

manufacturing overhead is bigger than applied overhead

5) If the amount of overapplied or underapplied overhead is not significant, the amount

is generally treated as a period cost and closed to the cost of goods sold. If the

amount is significant, the amount is sometimes prorated over the relevant accounts,

examples: work in process inventory, finished-goods inventory, and cost of goods

sold.
Q2  Cost behavior analysis

A & B 
Plan A Plan B

0.4x 20,000 + 20x

i) 

Q3 1. 
a. FIFO Method

Units (in pounds) % of completed 

Material  Conversion

WIP in beginning (% to be complete) 4,000 0% 25%

Equivalent units 0 1,000

Unit started and transf out 11,000 (15000- 100% 100%

4000)

Equivalent units 11,000 11,000

Units in ending WIP 16000+4000-11000- 5,000 100% 20%

4000

Equivalent units 5,000 1,000

Total  20,000 16,000 13,000

Reconciliation: Units completed and transferred out + Units in Ending WIP  > 15,000+5,000=
20,000

B.
Material cost 

cost

2,000 10,000

10,000 51,000

4,000 20,600

Total 81,600

Conversion Costs
 Direct labour cost 103,350

Direct department 52,000

cost

103350*40% 41,340

Total  196,690

Cost per equivalent unit Direct Material Conversion costs

Total of cost (November) a 81600 196690

Equivalent units b 16000 13000

Cost per equivalent a/b 5.10 15.13

units

C. 

Cost of Chemgro transferred to the finishing Department

Equivalent Cost per Cost per Direct Conversion Total

unit equivalent equivalent Materials  Cost 
unit (Conversion)
(Materia)

Open, WIP 22,800 46,510

Equ units 1,000 15.13 15130

from Op WIP

Equ units 11,000 5.10 15.13 56100 166430

started and
transferred
out 

Total 78900 228070 306970

(Transferred
out)

D. 

Equivalent Cost per Cost per Direct Conversion total

Units equi unit equivalent Material Cost
(Materials) (Conversion)

Equivalent 5000 5.10 25500

units
started 
 Equivalent 1000 5.13 15130
units
started 

Cost of 25500 15130 40630

Closing
WIP

2. Journal entries

a WIP 78,900
.

        Raw material inventory 78,900

(To record issue of material)

b WIP 103,350
.

        Direct labour 103,350

(To record direct labour cost)

c. WIP 93,340

          Manufacturing overhead 93,340

(To record manufacturing overhead

applied)

d Finishing departments 306,970

.

        WIP 306,970

(To record transferred of completed units)

Q4.  A. 
 
  July August Septembe Octobe Quarter 
r r

Budgeted unit 50,000 80,000 60,000 50,000 240,000

sales

B. 
   July Augus September October November  Total
t

Budgeted sales revenue   50,000 80,000 60,000 50,000 28,000 240,000

Cost of goods sold at 70% 35,000 56,000 42,000 35,000 19,600 168,000

Add: closing inventory   64,800 53,600 48,000 35,680 202,080

Less: beginning inventory 48,000 64,800 53,600 48,000 35,680 250,080

(20000 + 80% of COGS)

Required purchases 51,800 44,800 36,400 118,68 251,680

0

C. 

Operating expense budget  July  August September  October Total

Fixed Expenses 

Salaries expense  2,500 2,500 2,500 2,500 10,000

Rent expense  2,000 2,000 2,000 2,000 8,000

Dep. Expense  500 500 500 500 2,000

Insurance expense  200 200 200 200 800

Variable expense 

Sale commissions (15% of sales) 7,500 12,000 9,000 4,200 32,700

Miscellaneous expense (5% of sales) 2,500 4,000 3,000 1,400 10,900

Operating expense budget 15,200 21,200 17,200 10,800 64,400

D. 

July August September  October  Novembe Total

r

Budgeted sales revenue  50,00 80,000 60,000 50,000 28,000 268,000

0

Collection (same month) 30,00 48,000 36,000 30,000 16,800 160,800

 60% 0

Collection (next month) 40% 16,00 20,000 32,000 24,000 20,000 112,000
0

Total schedule Collection 46,00 68,000 68,000 54,000 36,800 272,800

0

E.

July Augus September October Total

t

Merchandise Purchases Budget 51,800 44,800 36,400 118,680 251,680

50% on the same mth 25,900 22,400 18,200 59,340 125,840

50% on the next mth 16,800 25,900 22,400 18,200 83,300

Expected cash disbursements for 42,700 48,300 40,600 77,540 20,9140

Merchandise Purchases

F. 

Budgeted cash disbursement for July August September  October Quarter

operating expenses

Sales salary paid (on the month) 1,250 1,250 1,250 1,250 5,000

Sales salaries (on the next month) 1,250 1,250 1,250 3,750

Sale commission (on the same 3,750 6,000  4,500 3,750 18,000
month) 7500/2
(7500/2) (12000/2 (9000/2) (7500/2
) )

Sale commission (on the next month) 3,750 6,000 4,500 14,250

Payment of payable  4,250

Total 9,250 12,250 13,000 10,750 45,250

Rent expense  2,000 2,000 2,000 2,000 8,000

Miscellaneous expense  2,500 4,000 3,000 2,500 12,000

Budgeted cash disbursement for 13,750 18,250 18,000 15,250 65,250

 operating expenses

G. 

Whitewater Sporting Goods Store No. 18

Cash Budget

Cash Budget  July August September October

Cash balance 15,00 11,550 11,233.33 18,883.33 15,000

beginning 0

Collection from 46,00 68,000 68,000 54,000 236,000

customers 0

Total cash 61,00 79,550 79,233.33 72,883.33 292,666.6

receipt 0 6

Less: Cash
Disbursements

Inventory  42,70 48,300 40,600 77,540 20,9140

0

Budgeted cash 13,75 18,250 18,000 15,250 65,250

disbursement 0
for operating
expenses

Truck 3,000
expenses

Total Cash 59,45 66,550 58,600 92,790 277,390

Disbursement 0
s

Ending cash 1,550 13,000 20,633.33 (19,906.67) 15,276.66

Balance

Min. cash 10,00 10,000 10,000 10,000

desired  0

Cash (8,450 3,000 10,633.33 (29,906.67)

efficiency )
(deficiency)

borrowing 10,00 10000

0

Principal - 16,66.67 16,66.67 16,66.67 5,000.01

repayments 
(10,000/6)

Interest 100 83.33 66.67 251

(10,000x12%/1 (10,000- 8,333.33-

2) 1666.67 = 1666.67=
8333.33x12%/1 6666.66x12%/
2) 12

Total  10,00 (1,766.67) (1,750) (1,733.34) 4,749.99

0

Ending cash 11,55 11,233.33 18,883.33 (21,640.01) 20,026.65

balance 0

Q5
1. a          Plantwide overhead rates:

    Departments (numbers in thousands)

  Componen
  Molding t Assembly Total

  Manufacturing departments:        
   Variable overhead  $ 3,500 $10,000 $16,500 $30,000
   Fixed overhead   17,500   6,200   6,100  29,800
    Total manufacturing
   department overhead $21,000 $16,200 $22,600 $59,800
  Service departments:        
   Power         18,400
   Maintenance          4,000
    Total estimated overhead       $82,200
  Estimated direct-labor hours (DLH):      
   Molding            500
   Component          2,000
   Assembly          1,500
    Total estimated
   direct-labor hours          4,000
Plantwide overhead Rate = $82,200/4,000 = $20.55 per D/L hr

B. Overhead cost of Elite case = (4+3+2) * 20.55 = $184.95

2. Departmental overhead rates

a. 90/125 x 4000  = 2880 
25/125 x 4000 = 800
10/125 x 4000 = 320

Service  Manufacturing 

Overhead costs Power  Maintenance Molding Componen Assembly

t

18400 4000 21000 16200 22600

Allocation of maintenance (4000) 2880 800 320

costs

b. 360/800 x 6400 = 2880

320/800 x 6400 = 2560
120/800 x 6400 =  960
Allocation of power costs (6400) 2880 2560 960
Variable expenses

Fixed costs  (12000) 12000 12000 12000

Total Allocated overhead costs $38760 $31560 $35880

c.

Total Allocated overhead costs $38760 $31560 $35880

/ machine hours   875 2000 1500

$44.30 $15.78 $23.92

3. 3. . hgyfgh

Overhead cost of Elite case = 

(5 machine hrs * $44.30) + (3 labour hrs * $15.78) + (2 labour hrs

* $23.92) = $316.68
 4 

Dillon may use a plantwide overhead rate to assign overhead to

products as the overhead cost is lower than using the
departmental overhead method. 

Q6 

1. Profit= Unit CM x Q – Fixed expense

0 = 9- 5 x Q – 32,000

0= 4 x Q – 32,000

4 x Q = 32,000

32,000 / 4= 8,000 units in sales to break even

2. a. 
Profit= Unit CM x Q – Fixed Expense

Profit= 9 – 5 x 15,000 – 32,000= 28,000

Profit= $28,000

B.

Profit= 9-5 x Q – 32,000

profit= 4 x Q – 32,000

4 x Q= 32,000

4/ Q= 32,000/4

= 8,000

3. 13-5 x 40,000- 29,000= 291,000

4. a. sales in units:  target profit + Fixed cost/ (price per unit- Variable cost per unit)

28,000 + 58,000/ 13- 5 =

86,000/ 8=

unit sales= 10,750

b. 30,500 + 58,000/ 13- 5=

88,500/ 8=

unit sales= 11,062.50

c.  Profit= 13-5 x 40,000- 58,000

Profit= 8 x 40,000- 58,000

Profit= 320,000- 58,000

Profit= $262,000

d. Profit= 13-5 x 40,000 x 0.20 – 58,000

profit= 326,000
E. 

profit=  3-5 x 40,000- 58,000

Profit= 8 x 40,000- 58,000

Profit= 320,000- 58,000= $262,000