Acc203E Managerial Accounting|Estimated Disposal Assessment Answer

Spoilage & reworked costsJob number 211Normal spoilage with estimated disposal selling price of $75 was incurred.Job number 212Normal spoilage amounting to $88 and abnormal spoilage of $38 were incurred.Job number 213Rework cost of $65 was incurred.(6)Job number 211 and Job number 212 were completed during the month.(7)Job number 210 was sold for cash at a mark-up of 30% on cost while Job number 211 was sold on credit at a price that allow the company to earn a gross profit margin of 20%.Required:(a)Computethe pre-determined overhead rate. (3 marks)(b)Calculate the followings:(i)Raw materials inventory as at 31 August.(ii)Work in process as at 31 August.(iii)Finished goods inventory as at 31 August.(iv)Selling price for Job number 210 and Job number 211.(c)Prepare the necessary journal entries to describeand summarise the transactions for August. Please show each job separately for the work in process inventory accounts only. Narrations can be ignored.(d)Compute the over-applied or under-applied overhead for August. e)Explain how the over-applied or under-applied overhead should be treated(f)Provide the necessary journal entries to close off the balance in the overhead control account assuming:(i)The overhead variances are not significant.(ii)The overhead variances are significant.Provide your final answer to the nearest dollar.

Question 2The costing system plays an important role in every organization within the decision making process. Without good cost information, a business will be severely handicapped. Hence, knowing and understanding the costs of your products or services represent a decisive factor in achieving business success.Required:Select an organization with which you are familiar. Using your own words as much as possible, and in not more than.(a)Provide a brief description of the organisation -background, the organizational structure, the nature of business, the industry and the environment it is operating in, its products/services, etc.(5 marks)(b)Describethe costing system adopted and how it is used to provide vital cost information for the management.(15 marks)(c)Does the costing system meet the needs of the organization? Discuss.(10 marks)Question 3Many managerial decisions (such as allocation of resources, pricing decisions and cost management) require a good understanding and application of cost terminologies. Based on the organization that you have chosen for Question 2, explainand provide one example of the following cost terminologies:Direct and indirect costs.Variable and fixed costs.Committed and discretionary costs.Controllable and uncontrollable costs.Upstream and downstream c