1 Assignment #1 Job Order Costing ONLY SUBMIT THE PAGES THAT START WITH NAME [page 4] Question [Chapters 2 and 5] (20 marks) Analysis of Cost Flows and Inventories under Job-Order Costing Fastmix Inc. manufactures electric mixers and chopping tools. A job-order costing system is used, since the products are manufactured in batches rather than on a continuous basis. The company started operations on October 1, 2022. Operating activities during the first 11 months of the fiscal year (through August 31) resulted in the following balances in selected accounts: Raw Materials# Manufacturing Overhead Balance 36,000 2,260,000* ? Balance ? Work-in-Process Cost of Goods Sold Balance 1,200,000 Balance 14,200,000 Finished Goods Balance 2,785,000 # The raw materials account includes (both) direct materials and indirect materials. * This figure represents the debits to the manufacturing overhead account for the first eleven months of the year. The following additional information is available on the company: a. The work-in-process inventory at August 31 consisted of two jobs: Total Cost as of Job No. Units Item August 31 6011 ............ 48,000 Professional mixers $700,000 7011 ............ 39,000 Base mixers 500,000 $1,200,000 b. The finished goods inventory at August 31 consisted of five separate items in stock: Items Quantity and Unit Cost Total Cost Professional mixers........ 5,555 units at $22 each $110,000 Premium mixers ............. 115,000 units at $17 each 1,955,000 Brass choppers .............. 10,000 units at $14 each 140,000 Steel choppers ............... 5,000 units at $16 each 80,000 Mixer utensil set ............. 100,000 units at $5 each 500,000 $2,785,000 2 c. Manufacturing overhead is applied to jobs on a basis of direct labour-hours. For the fiscal year 2023, management estimated that the company would work 450,000 direct labour-hours and incur $3,150,000 in manufacturing overhead costs. d. A total of 367,000 direct labour-hours were worked during the first 11 months of the year. Items (e) through (j) below summarize the activity that took place in the company during the month of September 2023. e. A total of $708,000 in raw materials was purchased during the month. f. Raw materials were requisitioned as follows: Job No. Quantity and Items Materials 6011 ............................... Professional mixers $210,000 7011 ............................... Base mixers 6,000 2021 ............................... 30,000 Steel choppers 181,000 3021 ............................... 10,000 Premium mixers 92,000 4021 ............................... 50,000 Costco mixers 163,000 ................................. Indirect materials 20,000 $672,000 g. The payroll during September was as follows: Job No. Hours Total Cost 6011 .............................................. 6,000 $62,000 7011 .............................................. 2,500 26,000 2021 ............................................ 18,000 182,000 3021 ................................................. 500 5,000 4021 .............................................. 5,000 52,000 Indirect labour ............................... 8,000 84,000 Sales and administration................ 120,000 $531,000 h. Other costs incurred in the factory during September were: Depreciation ................................. $62,500 Utilities............................................15,000 Insurance..........................................1,000 Property taxes ..................................3,500 Maintenance................................. 5,000 $87,000 i. Jobs completed during September and the units transferred to the finished goods warehouse were as follows: Job No. Quantity Items 6011 .............................. 48,000 units Professional mixers 7011 ............................ 39,000 units Base mixers 2021 .............................. 30,000 units Steel choppers 4021 .............................. 50,000 units Costco mixers 3 j. Finished products were shipped to customers during September as follows: Items Quantity Professional mixers........................................ 16,000 units Premium mixers .............................................32,000 units Base mixers ...................................................20,000 units Costco mixers ................................................22,000 units Brass choppers ................................................5,000 units Steel choppers ...............................................10,000 units Mixer utensil set .............................................26,000 units Required: 1. Determine the amount of under/over-applied manufacturing overhead for the fiscal year 2023 and indicate whether it is under-applied or over-applied. (6 marks) 2. (i) In general, what is the appropriate accounting treatment (for management accounting purposes, not IFRS) for under/over-applied overhead (at September 30, 2023). (2 marks) (ii) For Fastmix, discuss the appropriate accounting treatment (for management accounting purposes, not IFRS) for under/over-applied overhead (at September 30, 2023)? (2 marks) 3. Determine the dollar balance in the work-in-process inventory account as of September 30, 2023. Show all computations. [Ignore any under/over-applied overhead.] (5 marks) 4. For the Professional mixers, determine the dollar balance in the finished goods inventory account as of September 30, 2023. Assume a FIFO (first-in-first-out) flow of units. Show all computations. [Ignore any under/over-applied overhead.] (5 marks) [For those of you who are taking 293 as a co-requisite: Assume that a manufacturing company had 200 units in Beginning FGI and it sold 1,000 units this period. FIFO means: the 200 units (from BFGI) were sold first and, thus, the other 800 units must have been manufactured this period.] DO NOT SUBMIT PAGES 1 TO 3. IF YOU CHOOSE TO TYPE YOUR ANSWER, DO SO UNDER THE APPLICABLE QUESTION ON PAGE 4. DO NOT SUBMIT PAGES 5-7. IF YOU CHOOSE TO WRITE YOUR ANSWER, DO SO IN THE SPACE PROVIDED UNDER THE APPLICABLE QUESTION ON THE PAGES 5 TO 7. ONLY SUBMIT PAGES 5-7 AND DO NOT SUBMIT TYPE YOUR ANSWER HERE. YOU CAN SUBMIT IN CLASS OR IN DROP BOX ON CANVAS. IF WRITING YOUR ANSWER, SUBMIT AS PDF ON CANVAS. 4 294 ASSIGNMENT #1 NAME (Last, First): Student No.: Question [20 marks] 1. Determine the amount of under/over-applied manufacturing overhead for the fiscal year 2023 and indicate whether it is under-applied or over-applied. (6 marks) Type your answer here. 2. (i) In general, what is the appropriate accounting treatment (for management accounting purposes, not IFRS) for under/over-applied overhead (at September 30, 2023). (2 marks) Type your answer here. (ii) For Fastmix, discuss the appropriate accounting treatment (for management accounting purposes, not IFRS) for under/over-applied overhead (at September 30, 2023)? (2 marks) Type your answer here. 3. Determine the dollar balance in the work-in-process inventory account as of September 30, 2023. Show all computations. [Ignore any under/over-applied overhead.] (5 marks) Type your answer here. 4. For the Professional mixers, determine the dollar balance in the finished goods inventory account as of September 30, 2023. Assume a FIFO (first-in-first-out) flow of units. Show all computations. [Ignore any under/over-applied overhead.] (5 marks) Type your answer here. 5 294 ASSIGNMENT #1 NAME (Last, First): _____________________________________ Student No.: ________________________ Question [20 marks] 1. Determine the amount of under/over-applied manufacturing overhead for the fiscal year 2023 and indicate whether it is under-applied or over-applied. (6 marks) 2. (i) In general, what is the appropriate accounting treatment (for management accounting purposes, not IFRS) for under/over-applied overhead (at September 30, 2023). (2 marks) 6 (ii) For Fastmix, discuss the appropriate accounting treatment (for management accounting purposes, not IFRS) for under/over-applied overhead (at September 30, 2023)? (2 marks) 3. Determine the dollar balance in the work-in-process inventory account as of September 30, 2023. Show all computations. [Ignore any under/over-applied overhead.] (5 marks) 7 4. For the Professional mixers, determine the dollar balance in the finished goods inventory account as of September 30, 2023. Assume a FIFO (first-in-first-out) flow of units. Show all computations. [Ignore any under/over-applied overhead.] (5 marks)