(Done Paper) Referencing Styles : Harvard Question 2: Rocky River Ltd (from question 2) makes boats to customers’ specifications. The account balances as at Jul

(Done Paper) Referencing Styles : Harvard Question 2: Rocky River Ltd (from question 2) makes boats to customers’ specifications. The account balances as at Jul

Question 2: Rocky River Ltd (from question 2) makes boats to customers’ specifications. The account balances as at July 1 2015 were:Materials & Supplies $ 3,280Work In Progress $11,220Finished Goods $14,500Labour Control $ 1,000• The Work In Progress at 1 July was No.2 … View More Question 2: Rocky River Ltd (from question 2) makes boats to customers’ specifications. The account balances as at July 1 2015 were: Materials & Supplies $ 3,280 Work In Progress $11,220 Finished Goods $14,500 Labour Control $ 1,000 • The Work In Progress at 1 July was No.22 • Finished but not yet invoiced was Job No. 21 The following information related to July: Materials & Supplies purchased $7,280 Materials Issued: Job No. 22 $ 420 23 $6,200 24 $1,320 Indirect $ 920 Labour Incurred: Job No. 22 $ 300 23 $5,200 24 $ 840 Indirect $1,040 • Factory Payroll paid $7,400 • Additional Manufacturing Overheads incurred $1,100 • Overheads are applied to Jobs at 50% of Direct Labour • Job 21 and 23 were sold during July for a total sale price of $32,000 • Job 22 was finished during July but not delivered by 31 July • Job 24 was still is progress at 31 July a) Using the above information complete a Job Cost Card. b) Enter the opening balances in the factory ledger accounts and post all the transactions for July, Balance the accounts as at 31 July. Question 3: Based on a production level of 140,000 direct labour hours per year (2 direct labour hours per unit of production) the Plot Co. estimates that the unit cost of its product will be: Direct Material $10.00 Direct Labour $14.00 Overhead – Fixed $ 2.00 Variable $ 4.00 $30.00 Overheads are applied at a rate per direct labour hour and actual overheads incurred were $370,000. During the year 120,000 direct labour hours were worked in factory production. a) What was the estimated budget production for the year? b) What was the budgeted recovery rate used by the firm to recover all indirect costs? c) Determine the under/over applied overhead cost. d) Analyse your answers to determine the Spending Variance and Capacity Variance. e) Given these variances make a recommendation to management on the suitability of this cost assignment method. Justify your recommendation

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By | 2018-08-25T19:42:36+00:00 August 25th, 2018|Business|