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Management Accounting BAP22A

Tutorial Assignments Semester 1, 2014




Management Accounting
BAP22A

Question 1
The following information relates to Dolltime, a toy manufacturer.
Direct materials used in production $2,200,000
Advertising expense $110,000
Depreciation of factory building $105,000
Direct labour wages $490,000
Finished goods inventory at year end $120,000
Indirect labour wages $135,000
Production supervisor salary $50,000
Other manufacturing overhead $105,000
Overtime premiums paid $55,000
Idle time production employees $45,000
Administration costs $100,000
Office rent for sales staff $15,000
Sales commission $5,000
Product promotion costs $12,000

Required:
Calculate each of the following costs for the year:
a) Total prime cost
b) Total manufacturing overhead
c) Total conversion cost
Management Accounting BAP22A
Tutorial Assignments Semester 1, 2014
d) Total product cost
e) Total period cost
Note: Dont forget to use the finished goods inventory at year end in your
calculation (assume no finished goods at the start of the year)

Question 2

Francescas Fine Furniture incurred the following costs for the year ended 30 June,
2013:-

Direct Material $178,000
Direct Labour $336,000
Manufacturing Overhead $175,000

Products with a total costs of $121,000 were finished, and products costing $132,000
were sold on credit for $196,000.
There were no purchases of raw materials during the year.
The balances in the firms inventory accounts at the start of the year were as
follows:-
Raw materials $228,000
Work in process $19,000
Finished goods $32,000

Required:-
a) Prepare a summary of inventory and manufacturing accounts to show the Cost of
Goods Manufactured and Cost of Goods Sold (hint: consider starting and ending
balances and the journal entries/movement in the accounts during the year)
b) Prepare an income statement and partial balance sheet (showing inventory and
receivables accounts) for the year to 30 June 2013

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