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Answered: - Dear all This is a basic managerial accounting questions.


Dear all


This is a basic managerial accounting questions. If possible use a easy approach which i can understand and present it to my peers.

Thank you


ACC203e

 


 

Assignment 2

 


 

Group-based Assignment

 

This assignment is worth 30% of the final mark for ACC203e Managerial Accounting.

 

The cut-off date for this assignment is 14 April 2016, 2359 hrs.

 

This is a group-based assignment. You should form a group of 3 members from your seminar group.

 

Each group is required to upload a single report to MyUniSIM via your respective seminar group.

 

Please elect a group leader. The responsibility of the group leader is to upload the report on behalf

 

of the group.

 

It is important for each group member to contribute substantially to the final submitted work. All

 

group members are equally responsible for the entire submitted assignment. If you feel that the work

 

distribution is inequitable to either yourself or your group mates, please highlight this to your

 

instructor as soon as possible. Your instructor will then investigate and decide on any action that

 

needs to be taken. It is not necessary for all group members to be awarded the same mark.

 

___________________________________________________________________________

 


 

Question 1

 

Singa Handicrafts Ltd manufactures antique furniture. The company uses a job costing system

 

and manufacturing overhead is applied on the basis of direct labour hours.

 

In the budget for the current year, the following budgeted costs were included:

 

Manufacturing overhead

 

Direct labour cost

 

Budgeted direct labour rate

 


 

$420,000

 

$240,000

 

$30 per hour

 


 

On 1 August, the company had the following balances:

 

Work in process inventory

 

Job number 83

 

Job number 84

 

Raw materials inventory

 

Direct materials

 

Indirect materials

 

Finished goods inventory

 


 

$42,000

 

$26,750

 

$7,500

 

$3,500

 

$0

 


 

During the month, the following occurred:

 

(i)

 


 

The company worked on four jobs. The costs incurred and direct labour hours

 

consumed were as shown below:

 

Job Number

 

83

 

84

 


 

SIM UNIVERSITY

 


 

Direct material

 

10,500

 

0

 


 

Direct labour

 

17,500

 

11,000

 


 

Direct labour hours

 

600

 

350

 


 

Assignment 2 ? Page 2 of 5

 


 

ACC203e

 


 

Assignment 2

 


 

85

 

86

 

(ii)

 


 

?

 

7,500

 


 

32,500

 

4,400

 


 

Overhead for the month were as follow:

 

Indirect materials (all were used in production)

 

Depreciation - plant & machineries

 

Depreciation - delivery vans

 

Salaries - production

 

Salaries - sales & administration

 

Other factory costs

 

Other selling and administration costs

 


 

(iii)

 


 

?

 

$17,000

 

$2,500

 

$30,000

 

$25,000

 

$69,750

 

$40,000

 


 

Raw material purchased on credit

 

Direct material

 

Indirect material

 


 

(iv)

 


 

1,000

 

250

 


 

$37,500

 

$27,500

 


 

Spoilage & reworked costs

 

Job Number 83

 

Job Number 84

 

Job Number 85

 


 

Normal spoilage amounting to $190 and abnormal spoilage of $50

 

were incurred.

 

Normal spoilage with estimated disposal selling price of $200 was

 

incurred.

 

Rework cost of $140 was incurred.

 


 

(v)

 


 

The company completed job number 83 and job number 84. Job number 84 was sold

 

on credit at the selling price that will enable the company to earn a gross profit margin

 

of 50%.

 


 

(vi)

 


 

On 31 August, the company had the following balances:

 

Work in process:

 

Job number 85

 

Job number 86

 

Raw materials inventory

 

Direct materials

 

Indirect materials

 

Finished goods inventory

 


 

?

 

?

 

$5,000

 

$6,000

 

?

 


 

Required:

 

(a)

 


 

Determine the company's predetermined overhead rate.

 


 

(b)

 


 

Compute and show the following:

 

(i)

 


 

SIM UNIVERSITY

 


 

The cost of direct material issued to the job number 85.

 


 

Assignment 2 ? Page 3 of 5

 


 

ACC203e

 


 

Assignment 2

 


 

(ii)

 

(c)

 


 

The cost of indirect material to be included in the manufacturing overhead.

 


 

Illustrate the journal entries to record the following:

 

(i)

 


 

Issue of direct material to production and the direct labour incurred.

 


 

(ii)

 


 

Manufacturing overhead incurred during the month.

 


 

(iii)

 


 

Application of overhead to production.

 


 

(iv)

 


 

The costs of spoilage, rework and scrap.

 


 

(v)

 


 

Completion of job numbers 83 and job number 84.

 


 

(vi)

 


 

The sale of job number 84.

 


 

(d)

 


 

Determine the cost of the jobs that were still in production as at 31 August.

 


 

(e)

 


 

Calculate the cost of the finished goods inventory as at 31 August.

 

(45 marks)

 


 

Question 2

 

In the classic market exchange, traders own the resources and bear the full wealth effects of

 

their actions. Under such circumstances, there is no agency problems as the market performs

 

the three tasks (partition decision rights, measure performance and reward performance)

 

automatically.

 

However in an organization, this is not the case. Deliberate effort must be made to design an

 

effective organisational architecture that will ensure decision rights are partitioned optimally

 

and decision makers motivated to maximise firm value.

 

Required:

 

Select a company you are familiar with or one you are currently working in, or one with

 

information publicly available. Using your own words as much as possible, and in not more

 

than 2,000 words (in total):

 

(a)

 


 

Describe the industry the chosen company is operating in, and an outline of the

 

background, nature of business, the industry and the environment it is operating in, its

 

products/services, etc.

 

(5 marks)

 


 

(b)

 


 

Analyse the company?s organization structure and describe what has been put in place

 

by the company to replicate the three administrative devices to minimize agency

 

problems.

 

(10 marks)

 


 

SIM UNIVERSITY

 


 

Assignment 2 ? Page 4 of 5

 


 

ACC203e

 


 

(c)

 


 

Assignment 2

 


 

Describe any weaknesses of these existing systems.

 

(10 marks)

 


 

(d)

 


 

Suggest possible improvements that the company can adopt.

 

(15 marks)

 


 

Question 3

 

Costs can be classified as fixed and variable.

 

(a)

 


 

Define the terms: fixed costs and variable costs.

 

(2 marks)

 


 

(b)

 


 

In the context of the company that you have just selected, provide three (3) examples

 

of each.

 

(8 marks)

 


 

(c)

 


 

Explain the advantages of classifying costs as fixed and variable.

 

(5 marks)

 


 

---- END OF ASSIGNMENT ----

 


 

SIM UNIVERSITY

 


 

Assignment 2 ? Page 5 of 5

 


 

 


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