IIE Workbook Solutions MFAC6211

Learning Unit 5: Job costing systems

Activity 5.1

a) Direct Material Control

Opening Balance 120 000 Issued SH 18 250
Issued WF 32 860
Issued BN 12 640
Issued CF 6 580

Closing Balance 49 670

Manufacturing Overhead Control

Actual 64 220 Recovered 56 264
Under Recovered 7 956

Work-in-Process Control
Material 70 330 Finished Goods 160 510
Wages 45 760
Overhead 56 264

Closing Balance 11 844

Finished Goods
Straw Hats 45 090 Straw Hats 45 090
Wooden Fishes 83 708 Beaded Necklaces 31 712
Beaded Necklaces 31 712

Closing Balance 83 708

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IIE Module Guide Solutions MFAC6211

Calculations:
Job Material Wages Overhead* Total
Straw Hats 18 250 12 240 14 600 45 090
Wooden Fishes 32 860 24 560 26 288 83 708
Beaded Necklaces 12 640 8 960 10 112 31 712
Colourful fabric 6 580 - 5 264 11 844
70 330 45 760 56 264

* - Overhead recovered at 80% of Material costs

Beaded
b) Profit or Loss Straw Hats Necklaces Total
Sales 76 653 53 910 130 563
Manufacturing Cost 45 090 31 712 76 802
Under Recovery of Overheads 7 956
Gross Profit 45 805
Non-Manufacturing Costs -
Net Profit 45 805

Revision Exercise 5.1

a)
i) Material Control Account
Opening Balance 26 000 Issues - Job A 32 000
Purchases 78 000 Issues - Job B 27 000
Issues - Job C 15 000

Closing Balance 30 000

a)
ii) Salaries and wages control account
Bank 43 400 Job A 16 000
Job B 19 800
Job C 7 600

Closing Balance -

b) Job A

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IIE Module Guide Solutions MFAC6211

i)
Direct Material 32 000 Finished Goods 60 000
Direct Labour 16 000
Fixed Overhead (R 15 x
800) 12 000

Closing Balance -

Job B
Direct Material 27 000
Direct Labour 19 800
Fixed Overhead (R 15 x
990) 14 850

Closing Balance 61 650

c) Actual Overhead 35 000

Applied Overhead R 15 x (800 + 990 + 380) 32 550
Under applied (2 450)

Dr Cost of sales 2 450

Cr Manufacturing overhead 2 450

Revision Exercise 5.2

a) i) Profit Job Meanteam

Sales 65 000
COS
Material 18 000
Labour (16 x 36 x R 30) 17 280
Variable Manuf O/H (R 12 x 16 x 36) 6 912
Fixed Manuf O/H (R 16 x 16 x 36) Calc 1 9 216
Profit/(Loss) 13 592

Calc 1: Fixed Manuf O/H Recovery Rate:

16 000 / (400 + 600) = R 16

a) ii) Job Greatone (WIP)

Opening WIP 20 000
Material 8 000
Labour (R 40 x 8 x 48) 15 360

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IIE Module Guide Solutions MFAC6211

Variable Manuf O/H (R 12 x 8 x 48) 4 608

Fixed Manuf O/H (R 16 x 8 x 48) Calc 1 6 144

Direct Material
15 000 + 38 000 - 8 000 - 18 000 27 000

Inventory Value 81 112

b) WIP
Opening Balance 20 000 Finished Goods 51 408
Material (18 000 + 8 000) 26 000 (18 000 + 17 280 + 6 912 +
Labour (17 280 + 15 360) 32 640 9 216)
Variable Manuf O/H (6 912 + 4 608) 11 520
Fixed Manuf O/H (9 216 + 6 144) 15 360
Closing Balance 54 112

Revision Exercise 5.3

a)

Direct Material Control

Opening Balance 210,000 X3000 120,500
Purchases 440,300 X4520 180,300
X5850 215,600

Closing Balance 133,900

Wages Control
Bank 240,000 X3000 (1 100 x 50) 55,000
X4520 (1 600 x 50) 80,000
X5850 (2 100 x 50) 105,000

Manufacturing Overhead Control

Bank/Creditors 372,000 Work-in-progress 408,000
Cost of sales 36,000

Budgeted rate = 360 000 / (950 + 1 400 + 1 900) = R85

Applied overhead = 85 x (1 100 + 1 600 + 2 100) = R408 000

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IIE Module Guide Solutions MFAC6211

Work-in-Process Control
Material 516,400 Finished Goods 768,100
Wages 240,000
Manufacturing Overhead 408,000

Closing Balance 396,300

Finished Goods
X3000 269,000 Cost of sales 269,000
X5850 499,100

Closing Balance 499,100

Cost of sales
Finished goods 269,000 Cost of sales 36,000

b)

Calculations:
Job Material Wages Overhead Total

X3000 120,500 55,000 93,500 269,000

X4520 180,300 80,000 136,000 396,300

X5850 215,600 105,000 178,500 499,100

516,400 240,000 408,000

Profit or Loss Total

Sales 384,286
-
Manufacturing Cost 269,000
36,00
Over applied overheads 0
Gross Profit 151,286

Non-manufacturing Costs -

Net Profit 151,286

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IIE Module Guide Solutions MFAC6211

Revision Exercise 5.4

a)
Direct Material Control
Opening Balance 25,400 Hand Luxurious 1,200
Purchases 2,300 Sporty Deluxe 860
Leisure Galore 1,850

Closing Balance 23,790

Manufacturing Overhead Control

Bank/Creditors 2,100 Work-in-progress 2,346
24
Cost of sales 6

Applied overhead = (1200 + 860 + 1850) x 60%

Finished Goods
Hand Luxurious 2,280 Cost of sales 1,856
Sporty Deluxe 1,856

Closing Balance 2,280

Cost of sales
Finished goods 1,856 Over applied overheads 246

b)
Hand Luxurious
Direct Material 1,200 Finished Goods 2,280
36
Direct Labour 0
72
Manufacturing Overheads 0

Leisure Galore
Direct Material 1,850 Work-in-progress 3,590
63
Direct Labour 0

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IIE Module Guide Solutions MFAC6211

Manufacturing Overheads 1,110

c)
Calculations:
Job Material Wages Overhead Total
1,20 3 7
Hand Luxurious 0 60 20 2,280
8 4 5
Sporty Deluxe 60 80 16 1,856
1,85 6 1,11
Leisure Galore 0 30 0 3,590
3,91 1,47 2,34
0 0 6

Profit or Loss Total

Sales 2,970
Manufacturing Cost (1,856)
24
Over applied overheads 6
Gross Profit 1 360
Non Manufacturing Costs -
Net Profit 1 360

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