Home Take Group Test 2 – Chapter 3 (10 Mark)

No Name of Group Member ID Signature Section

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1. (4 Points)
 Hegel Company is a manufacturing firm that uses job-order costing. On
January 1, the beginning of its fiscal year, the company’s inventory balances
were as follows:
Raw materials Br.20, 000
Work in Process 15,000
Finished Goods 30,000
The co. applies overhead cost to jobs on the basis of machine-hours worked. For the current year,
the company estimated that it would work 75,000 machine-hours and incur Br.450, 000 in
manufacturing overhead cost. The following transactions were recorded for the year:
1. Raw materials were purchased on account, Br.410, 000.
2. Raw materials were requisitioned for use in production, Br.380, 000 (Br.360, 000 direct
materials and Br.20, 000 indirect materials).
3. The following costs were incurred for employee services: Direct Labor, Br.75, 000;
Indirect Labor, Br.110, 000; Sales Commissions, Br.90, 000; Administrative Salaries,
Br.200, 000.
4. Sales travel costs were incurred, Br.17, 000.
5. Utility costs were incurred in the factory, Br.43, 000.
6. Advertising costs were incurred, Br.180, 000.
7. Depreciation as recoded for the year, Br.350, 000 (80% relates to factory operations, and
20% relates to selling and administrative activities).
8. Insurance expired during the year, Br.10, 000 (70% relates to factory operations, and the
remaining 30% relates to selling and administrative activities).
9. Manufacturing overhead was applied to production. Due to greater than expected demand
for its products, the company worked 80,000 machine-hours during the year.
10. Goods costing Br.900, 000 to manufacture according to their job cost sheets were
completed during the year.
11. Goods were sold on account to customers during the year at a total selling price of Br.1,
500, 000. The goods cost Br.870, 000 to manufacture according to their job cost sheets.

Required:
a. Prepare journal entries to record the proceeding transactions.
b. Post the entries in (a) above, to T-accounts.
c. Is manufacturing overhead under or over applied for the year? Prepare a
journal entry to close any balance in the MO account to Cost of Goods Sold.
2. (3 Points)
 ABC Manufacturing Company had the following account balances for the
quarter ending September 30, unless otherwise noted.
Depreciation of Manufacturing Equipment $ 88,000
Depreciation of Office Equipment 41,200
Direct Manufacturing Labour 160,000
Direct Materials used 126,000
Finished Goods Inventory (July 1) 180,000
Finished Goods Inventory (September 30 170,000
General Office Expenses 101,800
Indirect Manufacturing Labour 62,000
Indirect Materials used 28,000
Marketing Distribution cost 10,000
Miscellaneous Plant Over Head 45,000
Plant Utilities 30,800
Property Tax on Factory Building 9,600
Property Tax on Salespersons’ Company Vehicles 4,000
Work-in-Process Inventory (July 1) 46,800
Work-in-Process Inventory (September 30) 57,000

Required:
A) Prepare a Cost of Goods Manufactured Schedule for the quarter
B) Prepare a Cost of Goods Sold Schedule for the quarter

3. (3 Points)
 Presented below is information from the records of DEF company for March:
Purchases:
Direct Materials 9,000,000
Indirect Materials 200,000
Office Supplies 420,000
Sales…………………………………… 36,000,000
Salaries and Benefits:
Selling and Administrative 4,000,000
Direct Manufacturing Labour 6,000,000
Rent* 4,000,000
Utilities* 1,200,000
Advertising 700,000
Inventories: March 1 March 31
Direct Materials $4,400,000 $1,600,000
Indirect Materials 500,000 600,000
Office Supplies 150,000 180,000
Finished Goods 24,000,000 16,000,000
* Of these costs, 60 percent are assigned to manufacturing and 40 percent to selling and administration .

Required:
A) Prepare a Schedule of Cost of Goods Manufactured.
B) Prepare an Income Statement for the month.
C) Compute: -Prime Costs(all Direct Manufacturing Costs)
-Conversion Costs (all Manufacturing Costs, other than
Direct Material Costs) and,
-Indirect Manufacturing Costs (Manufacturing Over Head Costs)
 ANSWER SHEET

1 (A)
Date Description Debit Credit
January 1

10

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 (B)
MOH Control
W. I. P. Control

Material Control

A/P
Sales Commission Exp.
Adm. Salary Exp.

Salaries & wages pay. Sales travel Exp.

Advertising Exp.

Depn. Exp. Accumulated Depn. Exp.

Insurance Exp.

MOH – Allocation (Applied) Prepaid insurance F.G Control

Sales
A/R COGS
(

(C)

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 2(A)
ABC Manufacturing Company
COGM Schedule
For quarter ending September 30

(B)
ABC Manufacturing Company
COGS Schedule
For quarter ending September 30,

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 3 (A)
DEF Company
COGM Schedule
For the month of March

(B)
DEF Company
Income Statement
For the month of March

(C)
Prime Cost Conversion Cost Indirect Manuf. Cost

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