Tyne Co. Uses A Job Order Cost System?

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ADMS 2510 3.0 Introduction to Management Accounting.
Winter 2015: Section: | Day: | Time: | Instructor: | M | MONDAY | 4-7 | Professor Nemi | N | WEDNESDAY | 7-10 | Professor Shum | O | THURSDAY | 7-10 | Professor Murison |
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uses a job order cost system. During the year the following transactions took place: a) Raw materials purchased on account: $45,000; b) Raw materials issued to production: $40,000: of these, 90% were direct and 10% were indirect. c) The prepaid insurance ($1,000) related to the manufacturing facilities. It expired half way through the year. A new annual insurance policy was paid for on 1st July for $3,000. d) Factory utility costs incurred totaled $13,500. e) At the beginning of the year the accumulated depreciation balance was 4150,000. Depreciation expense for the year was 80% for the manufacturing plant and 20% for the fleet of sales and delivery vehicles. f) Salaries and wages paid in the year totaled $103,000: (direct labour: $50,000, indirect labour: $10,000, Sales commissions $13,000, Administrative salaries: $30,000). g) Miscellaneous selling and administrative expenses were $15,000. h) Manufacturing overhead was applied to production on the basis of 150% of direct labour cost. i) Goods that had cost (according to the job cost sheets) $150,000 were transferred to finished goods. j) Goods that had cost $250,000 were sold for …show more content…
l) Payments to suppliers on account totaled 40,000.

Required:
Open a “T” account for each account on the beginning trial balance and enter the opening balance. (5 marks)
Post the transactions listed above to the “T” accounts (open new “T” accounts as necessary) identify each entry by the letters a through l from the list. (13 marks)
Close off any balance on the Manufacturing Overhead account to the Cost of Goods Sold account. (2 marks)
Prepare an income statement for the year in good form. (10 marks)

Question 3: 25marks.
Chen Company manufactures basketballs, materials are added at the beginning of the production process and conversion costs occur uniformly in the production process. They use the weighted average method of process costing.
Production and cost information of July are as follows:
Production information: Units Percent Complete
Work in process, July 1 500 60%
Units started in July 1,000
Work in process, July 31 600 30%

Cost information: Costs
Work in process, July 1: Materials

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