Prepare a job cost sheet and record the information given


Question 1

Jumbo Giant Limited manufactures three products, namely, Milk, Yoghurt and Ice-cream.

The initial joint cost of production is $600,000 for the year. This cost results in an output of 2,000,000 litres. Details relating to the 3 joint products are given below:

Quantities at split off point

Milk

Yoghurt

Ice-cream

1,000,000 litres

400,000 litres

600,000 litres

Sales price per litre at split off point

$ 1.00 per litre

$ 2.00 per litre

$ 3.00 per litre

Separable cost

$ 0.50 per litre

$ 1.25 per litre

$ 1.50 per litre

Sales price of ultimate product

$ 5.50 per litre

$ 4.00 per litre

$ 9.00 per litre

Required:

1. Allocate the joint cost between Milk. Yoghurt and Ice Cream using

a)   The Physical Method.

b)   The Relative Sales Value Method. Round percentage to 2 decimal places.

c)   Net Realisable Value Method. Round percentage to 2 decimal places.

 

2. Jumbo Giant Limited has a request from a prospective customer to further process all its Ice Cream production into Gourmet Ice Cream which will then be bought by the customer for $12.00 per litre. This will increase the separable costs of ice cream per litre to $2.60. Would you advise the company to accept the offer? Why or why not?

Question 2:

Mighty Mouse Limited estimates the following information for October 2014:

Sales      (Units)

22,000

Inventory - 1 Si October 2014

9,000

Inventory - 31st October 2014

7,500

The company's inventory policy requires ending inventory to be equal to 25% of the prior month's sales.

The company predicts sales to increase by 5% in November. December is a slow month and sales are estimated at 70% of November sales.

The cost price per unit is $5.00 and this expected to increase by 10% in December.

Required: Prepare a purchases budget in units and dollars for the quarter ending 30th December 2014.

 

Question 3:

Fussy Hair Ltd has decided to prepare a cash budget for the quarter ending 30$ September 2014 and provides you with the following data:

Services are provided on 30 day credit terms. As at 1 July 2014, the Cash at bank ledger account had a debit balance of $500,000.

The following estimates have been made for the next three months:

 

July

August

September

 

$

$

$

Sales

200,000

300,000

400,000

Cash purchases

150,000

140,000

160,000

Cash wages

15,000

20,000

28,000

Depreciation on plant

80,000

80.000

80.000

Electricity expenses

10,000

11,000

11.500

Insurance expenses

36,200

36.200

37,000

Loan repayment

 

20,000

20,000

Additional Information:

  • All sales are on credit.
  • It is expected that debtors will pay their accounts as follows:

c 50 per cent in the month following the sale.

o    20 per cent in the second month following the sale.

o    30 per cent in the third month following the sale.

  • Actual sales for the previous three months were as follows:
    • $300,000 in April 2014
    • $290,500 in May 2014
    • $320,000 in June 2014
  • Electricity expenses and insurance expenses are paid the following month after they are incurred. June expenses were as follows:
    • Electricity expenses $8 000
    • Insurance expenses $35,000

Question 4

Terrific Tables Pty Ltd incurred the following costs to produce job number TB300, which consisted of 500 office desks.

Direct material:

1 June                 Requisition no. 520: 900 metres of timber @ 8.00 per metre

18 June               Requisition no. 101: 600 metres of steel @ $0.20 per metre

Direct labour:

18 June               Timesheet no. 72             500 hours@$14 per hour

Manufacturing overhead:

Applied on the basis of direct labour hours @$12 per hour.

Additional information:

Job TB300 was completed on 18 June.

Required:

Prepare a job cost sheet and record the information given above and also a cost summary for job TB300.

Solution Preview :

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Managerial Accounting: Prepare a job cost sheet and record the information given
Reference No:- TGS0651729

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