Part B 3 Journal Entries

1 1
a Y = a = bX Y = 7,450 +7x60
a= 7,450.00 Y= 7,870.00
b= 7
X 60
2
b Y = bX
= K7x45
= 315
3
C Lowest cost Driver = 20 hours
Highest cost driver = 70 hours

Lowerst cost driver 4

Y = K7450 + K7x20
= K7,590

Highest Cost Driver

Y = K7450 + K7 x 70
= K7,940

2 Company A K K
Sales 4,000,000.00
Finished goods (1/01/20147) 600,000.00
Costs of goods manufactured 3,800,000.00 5
Costs of goods available for production 4,400,000.00
Less: Finished Godds (31/12/2014 1,200,000.00
Costs of Goods Sold 3,200,000.00
Gross profit 800,000.00
6
Company B
K K
Finished Goods (1/01/2014)
Costs of Goods manufactured
Costs of goods available for sale 1,490,000.00 7
Less: Finished Goods (31/12/2014 190,000.00
Costs of Goods Sold 1,300,000.00

Company C
8
Sales 429,000.00
Less: Costs of Goods Sold
Finished goods (1/01/2014) 45,000.00
Costs of goods manufactured 340,000.00 9
Costs of goods available for sale 385,000.00
Less: Finished goods (31/12/2014) 52,000.00
Costs of goods sold 333,000.00
Gross profit 96,000.00
3 Journal Entries
Materials Inventory Control 13,500.00
Accounts Payable 13,500.00
To account for materials purchase on
account.

Work in Process 17,500.00

Materials Inventory Control 17,500.00
To record materials issued to production

Factory Overhead 1,800.00

Materials Inventory Control
Issued indirect materials for production

Payroll 27,000.00
Payroll Payable 27,000.00
Accrued payroll

Marketing Salaries 5,000.00

Administrative salaries 3,000.00
Work in Process 12,000.00
Factory overhead 7,000.00
Payroll payable 27,000.00
Being ofr distribution of payroll

Factory Overhead 2,508.00

Cash at Bank 2,508.00
Being for payment of various indirect
manufacturing costs

Factory overhead 8,500.00

Accounts payable 8,500.00
Being for indirect manufacturing costs
incured on account

Work in process 19,808.00

Factory overhead 19,808.00
Facctory overhead costs charged to
production.

Finished Goods Inventory 60,000.00

Work in process 60,000.00
Goods completed and transferred

Accounts Receivable 75,000.00

Sales Revenue 75,000.00
Being for credit sales
Cost of goods sold 44,900.00
Finished goods inventory 44,900.00