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Answer:

Req. 1 Manufacturing OH Rate per DLH = $9.25

Req. 2 Black & White hand bags to be produced in Job 114 = 40

Customer order 7 and inv 33

Req.4 Cutting time per 4 bags 30 minutes

Total cutting time 40 bags 30*40/4 = 300 minutes

Sewing time 40 bags 70*40 = 2,800 minutes

Ironing time 40 bags 8*40 = 320 minutes

Total = 3,420 mites = 57 hrs.

Total hours required for Job 114 = 57 hours

Req.6 Indirect materials might be used

1. Zips
2. Linings or buttons

Req. 7 Equipments need

1. Cutting Machine
2. Sewing Machine
3. Scrubber
4. Iron
5. Press

Req.8 materials need to be purchased

Material Quantity

BWFF 20-6= 14 yards


BW Check 30-12 = 18 yards

B Fringe 0 yards

B Strap 70 yards

Plcan 0 sheets

Int4 20 yards

Re.9 BWCheck will be purchased from JoAnne Fabrics because its cost per yard is $7
which is lower than other supplier cost $9 per yard.

BStrap will be purchased from JoAnne Fabrics because it is not available with
other supplier.

BWFF will be purchased from Hancack Fabrics because it available only with
them.

Int4 will be purchased from JoAnne Fabrics because its cost per yard is $4 which
is lower than other supplier cost $5 per yard.

Req.11 Raw Material Inventory

Item Quantity Amount

BWFF 21 yards $126

BWCheck 48 yards $364

BFringe 63 yards $189

BStrap 70 yards $140

Plcan 25 Sheets $22.50

Int4 52 yards $208

Total Raw material Inventory $1,049.50


Req. 14 At this stage material records will be updated for material issued for Job 114.

After issue on 10/9 material records will be;

Raw Material Inventory

Item Quantity Amount

BWFF 1 yards $6

BWCheck 18 yards $126

BFringe 23 yards $69

BStrap 0 yards $0

Plcan 15 Sheets $13.50

Int4 2 yards $8

Total Raw material Inventory $222.50

Req. 19 …. On the balance sheet Work In Process Inventory.

After the ……….. Finished Goods Inventory

Req. 20 Finished Goods Inventory $1,615.14

Req. 21 Selling Price of 7 bags $525

Cost of Goods Sold 7*48.94 $342.58

Gross Profit $182.42

Req. 22 No, it does not match price of competitor because cost per unit is $48.94.

Katie’s Boutique should purchase bags from overseas manufacturer.

Req. 23 Yes, Cost of Job 114 would have been different if any other method of valuation
of inventory is used because then cost of direct material will be different.
Req. 24 Yes, Cost of Job 114 would have been different if direct labor cost would have
been used for allocation of overheads rather than direct labor hours because
allocation rate for manufacturing overheads would have been different.

Req. 25 Yes, Cost of Job 114 would have been lower if equipments were 6 years old
because then there will be no depreciation and overheads allocation rate will be
lower than present rate.

Req. 26 ……. Selling and administrative personal Selling and Administrative cost

How……. Manufacturing Overheads

Req. 27 Ideas to reduce costs

1. By application of standard costing


2. By preparing flexible budget and variances
3. By purchase of material in EOQ

Req. 28 1. Raw material Inventory 450

Accounts Payable 450

2.WIP Inventory 707

Raw material Inventory 707

3.WIP Inventory 742

Payroll Expense 742

4.WIP Inventory 508.75

Manufacturing Overheads 508.75

5.Finished Goods Inventory 1,957.75

WIP Inventory 1,957.75

6.Accounts Receivable 525


Sales revenue 525

Cost of Goods Sold 342.58

Finished Goods Inventory 342.58

7.Manufacturing Overheads 3,500

Cash 3,500

8.Manufacturing Overheads 1,500

Raw material Inventory 1,500

9.Manufacturing OH incurred $25,450

Manufacturing OH allocated $28,934

OH over allocated $3,484

Manufacturing Overheads 3,484

Cost of Goods Sold 3,484

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