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# ACC103 Revision Question

 Out of 20 questions
- 20 theory and concepts related question

## Which covers chapter 1 – 3

 For the theory and concept related questions, students are required to READ the
chapter 1- 3 thoroughly.
 For the calculation questions, it is advisable for students to attempt questions from
text book:

Ex2, 24, 2,25, 2.26, 2.27, 2,28, 2.37, P2.38, P2.43 & P2.44

Ex3.24, 3.25, 3.26, 3.27, 3.28, 3.33, 3.34, 3.35, P3.51, P3.54, P3.55 & P3.58.

Question 1

Rental 5,106,000
Depreciation – office building 650,000
Utilities – factory 336,000
Direct materials Jan 1, 2012 258,000
Finished goods Jan 1, 2012 3,430,000
Work in process Jan 1, 2012 238,000
Direct materials Dec 31, 2012 390,000
Finished goods Dec 31,2012 3,750,000
Work in process Dec 31, 2012 180,000
Direct Labour 6,720,000
Depreciation factory machinery 1,980,000
Sales 170,300,000
Indirect labor 230,000
Direct material purchase 13,412,000
Stationeries expense 8,600
Insurance 200,000
Depreciation of factory equipment 45,000
Equipments 128,000
• Rental is divided to the ratio of 4:1 between factory and office
• Stationeries is divided to the ratio of 2:3 between factory and office
• Insurance is divided into the ratio of 3:2 between factory and office
You are required to prepare the Manufacturing Account for the year ended 31 Dec 2012
Question 2
Following are the balance of inventories on
1 Jan 2020 31 Dec 2020
Finished Goods 400,000 500,000
Work in process 250,000 300,000
Material 190,000 280,000
During the year:
Sales 1,000,000
Material purchases 600,000
Material returns 10,000
Carriage inwards 10% of net purchases
Labour cost (5% indirect) 400,000
Indirect material 30,000
Equipment (70% used by factory) 1,500,000
Equipment insurance 90,000
Rental 13,000
Depreciation of office building 100,000
Depreciation of office furniture 12,000
Depreciation of equipment 20,000

• Rental is shared between office & factory on the ratio of 4:1
You are required to prepare the Manufacturing Account for the year ended 31 Dec 2020
Flow of Job Costing (step by step)

## 1. Determine if there are beginning work in process.

This may be important in determining the total
cost of a product in job cost sheet and the WIP
account

## Dr Material Inventory a/c

Cr Accounts payable / Cash at
2. Record the direct material purchased
bank
Dr WIP a/c
3. Record the direct material used
Cr Material Inventory a/c
4. Record the indirect material used
Cr Material Inventory
Dr WIP a/c
5. Record the direct labour cost incurred
Cr Wages Payable
6. Record the indirect labour
Cr Wages Payable
To calculate the overhead applied, determine
whether the overhead is allocated on the basis of Dr WIP a/c
machine hour or direct labour hour. Calculate the per Cr Manufacturing overhead a/c
determined overhead. Multiply the PDOR with the
actual labour hour or actual machine hour
Cr Cash at bank/ Prepaid
Accumulated depreciation
9. Goods completed
Dr Finished Goods Inventory
To calculated the cost of job completed, you are
Cr WIP a/c
required to prepare the job cost sheet
Cost Price
Dr COGS
Cr Finished Goods Inventory
10. Completed Goods Sold
Selling Price
Dr A/c Receivable
Cr Sales
Question 3
Kiddos involved in producing customised toys. It uses a job order costing system and the
factory overhead is allocated on the basis of machines hours. Total factory overhead is
estimated to be \$750,000 for the current year. Kiddos estimate that its total machine hours for
the year are 50,000 hours.
The following information is for the month of June 2012:

## Inventories on June 1, 2012:

Work in Process - \$20,000: Job TAP (\$12,000) and Job SHOOT (\$8,000)

During June, the factory worked on its existing product: Job TAP and Job SHOOT as well as
new product SLAP. Materials (including supplies) purchased during the month amounted to
\$20,000. Materials issued to TAP amounted to \$3,000, SHOOT was issued materials of \$3,500
and SLAP was started during the month and received materials amounting \$5,500.

During the month, the direct labor rate was \$15 per hour. Labour and machine hours recorded
for the month of June 2012:
Job Direct Labor Hours Machine Hours
TAP 200 350
SHOOT 250 420
SLAP 300 330

During June, indirect material used were \$1,100, indirect labour cost incurred were \$3,000,
insurance amounted to \$2,500 (all relates to the factory operations); depreciation on factory
machinery amounted to \$6,000 and rental amounted to \$30,000 (20% of rental is related to the

Job TAP and SHOOT were completed during June and transferred to Finished Goods. Job TAP
was sold for \$40,000 and Job SHOOT was sold for \$50,000 in June.

Required:
a. Show the workings for pre-determined overhead rate
b. Prepare the necessary journal entries to record the transaction.
c. Prepare a Job Cost Sheet for Job TAP & SHOOT
d. Determine whether the overhead was under or over applied. What is the record?
e. Work in Process Inventory A/C
Question 4

Socceroos produces customized sports apparels. Socceroos uses a job order costing system and
the factory overhead is allocated on the basis of direct labour hours. Total factory overhead is
estimated to be \$2,000,000 for the current year. Socceroos estimates that its total machine hours
for the year are 10,000 hours and total direct labour hours of \$12,000 hours.

## Inventories on June 1, 2013:

Finished Goods Inventory: TOP - \$45,000
Work in Process - \$50,000: LEFT (\$23,000) and RIGHT (\$27,000)

During June, the factory worked on its existing product: RIGHT and LEFT as well as new
product BOTTOM. Materials (including supplies) purchased during the month amounted to
\$140,000. Materials issued to RIGHT amounted to \$35,000, LEFT was issued materials of
\$55,000 and BOTTOM was started during the month. Total material that was issued to
production was \$160,000

During the month, the direct labor rate was \$110 per hour. Labour and machine hours recorded
for the month of June 2013:
Job Direct Labor Hours Machine Hours
RIGHT 350 200
LEFT 420 250
BOTTOM 330 300

During June, indirect material were used, indirect labour cost incurred were \$36,000, indirect
material issued were \$15,000, insurance amounted to \$30,000 (all relates to the factory
operations); depreciation on factory machinery amounted to \$35,000 and rental amounted to
\$80,000 (25% of rental is related to the administrative office).

RIGHT & BOTTOM and were completed during June and transferred to Finished Goods.
RIGHT was sold for \$190,000 and BOTTOM was sold for \$210,000 in June.

Required:
a. Show the workings for pre-determined overheadrate
b. Prepare the necessary journal entries to record the transaction.
c. Prepare a Job Cost Sheet for RIGHT & BOTTOM
d. Determine whether the overhead was under or over applied. What is the record?