Records:
Dr
Dr
RM
12.00
RM
280
3hours (150% x RM8)
RM
WIP
Manufacturing Overhead
Cr
Wages payable
RM
348
RM
RM
84
432
Non-productive idle time - 4 hours x RM8 =
OT premium (8hours) 5hours (100% x RM8)
3hours (50% x RM8)
OT premium - 3hours (50% x RM8) =
Normal hours worked - 35 hours x RM8 =
Direct labor cost
RM 292
Manufacturing Overhead
RM
96
Normal hours worked - 35 hours x RM8 =
OT = 3hours (150% x RM8) +
RM
36
Total wages (Wages payable)
RM 432
280
36
5hours (200% x RM8)
RM 80
RM
RM
RM
32
40
12
( required by customer)
+
Cracko worked for 46 hours during the pay week ended April 24. His normal working week consists of 35 hours, of which 31
hours were spent on production while the remaining 4 hours were non-productive idle time. Cracko worked 3 hours overtime
at a premium of 50% on Monday April 20 because a customer required work finished by Tuesday, April 21 even if overtime had to
be worked to complete it. Cracko worked further 8 hours overtime on Wednesday April 22 on other production. It is the policy of
the company to pay an overtime premium of 100% after the first 3 hours on any one day. Cracko’s normal wage rate is RM8
per hours
Question 1
Mid Semester Revision Questions
*Idle time X in wages payable
WIP
Manufacturing Overhead
Wages payable
Cr
9000
2250
11250
1000
Idle time =20*50
OT on weekdays =10*(50*50%)
OT on weekends =14*(50*100%)
Public holiday wages
Manufacturing Overhead
2250
Records: Dr
Dr
300
200
OT on weekdays =12*(50*50%)
OT on weekends = =4*(50*100%)
Direct labor cost
500
250
700
300
7500
3450
Normal hours worked (150 x 50)
OT - 22 x (150% x 50)
- 18 x (200% x 50)
Total wages / wages payable
11250
Required: calculate the total wages, the amount to be treated as manufacturing overhead, direct labor cost and the records.
VUVUZELA is a labour who works at Bolasepak Manufacturer. The details of his work schedule are as follows:
He worked for a total of 190 hours during the month ended 30 September 2016. His normal contracted working month consists of 150 hours, of which 130 hours were spent on production while the remaining was non-productive idle time.
·
22 hours during weekdays
Out of the total 40 hours overtime worked during the month, 18 hours were worked on 4 weekends.
·
He had to work a total of 16 hours overtime during the month (12 hours on a week day & 4 hours on a weekend) in order to meet the customer’s order dateline.
·
(10 hours during weekdays & 14 hours during weekends)
He worked the remaining 24 hours overtime on other production and support activities.
·
Furthermore, he also worked on a public holiday which fell on a weekday. He was paid a total of RM 300 on top of his normal rate per hour.
·
It is the policy of the company to pay an overtime premium of 50% for overtime worked on weekdays and 100% premium for overtime worked on weekends.
·
VUVUZELA’s normal wage rate is RM50 per hour
·
Question 2
Stationeries expense
Insurance
Depreciation of factory equipment
Total Manufacturing cost
Work in process Jan 1, 2018
Total WIP during the year
Work in process Dec 31, 2018
Cost of goods manufactured
Indirect labor
Manufacturing cost
Office rental
Other overhead
Utilities – factory
Depreciation factory machinery
Cost of direct materials available for use
Direct materials Dec 31, 2018
Cost of direct material used
Direct Labor
Prime cost
4084800
300,000
336,000
1,980,000
230,000
3440
120000
45,000 7099240
27099240
238,000
27337240
-180000
27157240
13670000
-390000
13280000
6720000
20000000
Schedule of cost of goods manufactured for the year ended 31 Dec 2018
Direct material cost
Direct materials Jan 1, 2018
258000
Direct material purchase
13412000
Income statement
?
1,500,000
90,000
13,000
100,000
12,000
20,000
150,000
600,000
1,000,000
600,000
400,000
1-Jan-20
400,000
250,000
190,000
380000 DL
31-Dec-20
500,000
300,000
280,000
Equipment insurance
Factory rental
Depreciation of equipment
Other overhead
Total Manufacturing cost
Work in process Jan 1, 2018
Total WIP during the year
Work in process Dec 31, 2018
Cost of goods manufactured
Indirect labor
Indirect material
Manufacturing cost
20,000
153000
63,000
13,000
14,000
150,000
Schedule of cost of goods manufactured for the year ended 31 Dec 2020
Direct material cost
Direct materials Jan 1, 2018
Direct material purchase
600,000
Cost of direct materials available for use
Direct materials Dec 31, 2018
Cost of direct material used
Direct Labor
Prime cost
413,000
1,303,000
250,000
1553000
-300,000
1253000
790000
-280,000
510000
380000
890000
190,000
Additional Information:
•
Rental is shared between office & factory on the ratio of 4:1
You are required to prepare the schedule of cost of goods manufactured for the year ended 31 Dec 2020
Finished Goods
Work in process
Material
During the year:
Sales
Material purchases
Labor cost (5% indirect)
Indirect material (30% of cost of direct material used)
Equipment (70% used by factory)
Equipment insurance
Factory Rental
Depreciation of office building
Depreciation of office furniture
Depreciation of equipment
Other overhead
Sales
Question 4
Following are the balance of inventories on
Income statement
Question 5
Kiddos involved in producing customised toys. It uses a job order costing system and the factory overhead is allocated based on machines hours.
Total factory overhead is estimated to be RM750,000 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 - RM20,000: Job TAP (RM12,000) and Job SHOOT (RM8,000)
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 RM20,000.
Materials issued to TAP amounted to RM3,000, SHOOT was issued materials of RM3,500 and SLAP was started during the month and received materials amounting RM5,500
During the month, the direct labor rate was RM15 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 RM1,100, indirect labour cost incurred were RM3,000,
insurance amounted to RM2,500 (all relates to the factory operations); depreciation on factory machinery amounted to RM6,000 and rental amounted to RM30,000 (20% of rental is related to the administrative office).
Job TAP and SHOOT were completed during June and transferred to Finished Goods. Job TAP was sold for RM40,000 and Job SHOOT was sold for RM50,000 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
a)
pre-determined overhead rate
750000/50000
$15 per machine hour
b)
Journal entry
i)
Dr Material inventory
20000
Cr A/C Payable
ii)
Dr WIP inventory
20000
12000
Cr Material inventory
iii)
Dr WIP inventory
12000
11250
Cr Wages payable
iv)
Dr WIP
11250
16500
Cr MOH
v)
Dr MOH
16500
36600
Cr Wages Payable
Material Inventory
Insurance payable
Depreciation on factory machinery
Rental payable
vi)
vii)
Dr Finished Good inventory
Cr WIP inventory
Cost price
Dr COGS
3000
1100
2500
6000
24000
44800
44800
44800
Cr Finish goods inventory
Selling price
Dr Acc recieable/bank
44800
90000
Cr sales revenue
90000
a) PDOR
2m/12k
= 166.67
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 RIGHT & BOTTOM
d.
Determine whether the overhead was under or over applied. What is the record?
RIGHT & BOTTOM were completed during June and transferred to Finished Goods. RIGHT was sold for RM190,000 and BOTTOM was sold for RM210,000 in June.
During June, indirect material were used, indirect labour cost incurred were RM36,000, indirect material issued were RM15,000,
insurance amounted to RM30,000 (all relates to the factory operations); depreciation on factory machinery amounted to RM35,000 and rental amounted to RM80,000 (25% of rental is related to the administrative office).
During the month, the direct labor rate was RM110 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, 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 RM140,000.
Materials issued to RIGHT amounted to RM35,000, LEFT was issued materials of RM55,000 and BOTTOM was started during the month. Total material that was issued to production was RM160,000
Inventories on June 1, 2013:
Finished Goods Inventory: TOP - RM45,000
Work in Process - RM50,000: LEFT (RM23,000) and RIGHT (RM27,000)
The following information is for the month of June 2013:
Socceroo’s produces customized sports apparels. Socceroo’s 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 RM2,000,000 for the current year. Socceroo’s estimates that its total machine hours for the year are 10,000 hours and total direct labour hours of RM12,000 hours.
Question 6