Essays on Management Accounting for Business Assignment

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The paper 'Management Accounting for Business' is a great example of a Finance and Accounting Assignment. The company may favor the second if overhead costs in the molding department have a cause-and-effect relationship with machine-hours, while those in the component and assembly departments have a cause-and-effect relationship with direct labor hours. In this case, the computed total manufacturing cost in part (2) is of similar magnitude to the cost in part (3), and therefore one might be inclined to use the simpler method in part (2) rather than the more accurate but more complex method in part (3). Question 2 Total prime costs = Cost of materials + Cost of direct labor = 1 050 000 + 47 500 = 1 340 000 Total manufacturing overhead costs = Service department costs + On-costs for production supervisor + Depreciation on factory building + Production supervisor's salary + Total overtime premiums paid + Cost of idle time: production employees = 50 000 + 242 500 + 4 500 + 57 500 + 22 500 + 27 500 + 20 000 = 2 062 500 Total conversion costs = Cost of direct labor + Indirect labor: on-costs + Indirect labor: wages + Manufacturing overhead costs = 47 500 + 15 000 + 70 000 + 2 062 500 = 2 195 000 Total product costs (for external reporting purposes) = Cost of materials + Cost of direct labor + Manufacturing overhead costs = 1 050 000 + 47 500 + 2 195 000 = 3 292 500 Total period costs = Administrative costs + Rental of office space for sales personnel + Sales commissions + Product promotion costs + Advertising expense = 75 000 + 7 500 + 2 500 + 5 000 + 49 500 = 139 500 Question 3 73 000 * $45 = $3,285,000 T11-007 = 300 * $45 = $13,500 N11-013 = 1,000 * $45 = $45,000 N11-015 = 1,400 * $45 = $63,000 D12-002 = 2,500 * $45 = $112,500 D12-003 = 800 * $45 = $36,000 Total = $270,000 To November Projected manufacturing overhead = $3,285,000 Actual manufacturing overhead = $3,300,000 Manufacturing overhead is over-applied by $3,300,000 - $3,285,000 = $15,000. During December Projected manufacturing overhead = $270,000 Actual manufacturing overhead = $288,000 Manufacturing overhead is over-applied by $288,000 - $270,000 = $18,000. Finished goods inventory = Beginning finished goods inventory + Cost of goods manufactured - Cost of goods Finished goods inventory = 375 000 + 9 390 000 = $9 765 000 Schedule of cost of goods manufactured for Vision Pty Ltd Direct materials     Beginning raw materials inventory 315000   Plus; Net purchases 2787000   Minus; Ending raw materials inventory 255000   Raw materials used in production   2847000 Direct labor   2775000 Manufacturing overhead     Indirect material 402000   Indirect labor 1125000   Utilities 801000   Depreciation 1260000 3588000 Total manufacturing cost   9210000 Beginning work in progress   180000 Cost of goods manufactured   9390000  

References

Drury, C. Management Accounting for Business, 2005. Thomson publishers, pp. 144-148.

Langfield-Smith, K. Thorne, H. and Hilton, R. Management Accounting: Information for creating and managing value, 2012. 6th ed. McGraw-Hill Australia Pty Ltd.

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