ACCT 301 SEU Cost accounting discussion questions

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Business Finance

acct 301 Cost Accounting

SEU

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Re-write the questions in the answer sheet.

oFont size must be 14 points.

oDo NOT choose MANY font colors. The answer must be different COLORE (blue, or green).

oDo NOT underline, italic, highlight or bold the answers (unless it is necessary)

-Write the answers in your own words DO NOT copy and paste them.

-If you engaged in plagiarism, you will get ZERO marks in the assignment or course.

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- - Re-write the questions in the answer sheet. o Font size must be 14 points. o Do NOT choose MANY font colors. The answer must be different COLORE (blue, or green). o Do NOT underline, italic, highlight or bold the answers (unless it is necessary) Write the answers in your own words DO NOT copy and paste them. If you engaged in plagiarism, you will get ZERO marks in the assignment or course. Questions: 1- Prepare the journal entries for the following: (4 Points) a. When raw materials are received, Give an example b. When raw materials are sent to the factory floor, Give an example c. When a job is completed, what happen to the cost, Give an example d. Overhead expenses (salary) paid by cheque $ 5000 e. Utilities (Indirect expenses) paid in cash $ 10000. f. Salaries totaling $5,000 are accrued; 35% of these costs are direct labor, 40% are indirect labor and 25% are overhead expense. Prepare the journal entry. g. Overhead costs are allocated to work in process using an allocation rate of 150% of direct labor costs and 300% of overhead expenses. Prepare the journal entry. (Give different examples- examples should not be same) 2- Riyadh Electricity Company manufactures chandeliers. Following is information for next year’s operations, based on an estimated volume of 20,000 units: (4 Points) Expected revenues $1,000,000 Unit costs: Direct materials $6.25 Direct labor 15.75 Variable overhead Fixed manufacturing overhead 5.50 2.50 Total $30.00 Other fixed costs: Administration, marketing, etc. $225,000 Income tax rate 30% a. What is the breakeven point for next year? b. What is next year’s projected after-tax income? c. Suppose the managers set a target after-tax income of $100,000. Estimate the number of units that must be sold. 3- Ahmed has budgeted next year’s sales at 8,000 units. (2Points) Compute Ahmed's degree of operating leverage. If P = 1,000, V = 400, F = 850,000.
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Explanation & Answer

Attached.

HORNGREN'S ACCOUNTING - 12th Edition

Solutions Manual

Solution:
Requirement 1

Date

Accounts and Explanation
a Purchases
Cash
(Purchased raw materials on cash)

Debit
$30,000

Credit
$30,000

b Sendng raw materials to the factory does not involve any transaction
c

When a job is completed, the cost of completing the job is accounted for
Finished goods are recorded to the inventory and cost incurred is
adjusted e.g. recording p...


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