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Date Particular L/F Rs. Rs

The document contains journal entries recording various manufacturing transactions including: 1) Recording the cost of raw materials, labor, and factory overhead charged to Work in Process. 2) Recording the cost of rework charged back to Work in Process. 3) Transferring the cost of completed units from Work in Process to Finished Goods. It also shows calculations for economic order quantity, reorder levels, and inventory valuation.

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Asad Butt
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45 views

Date Particular L/F Rs. Rs

The document contains journal entries recording various manufacturing transactions including: 1) Recording the cost of raw materials, labor, and factory overhead charged to Work in Process. 2) Recording the cost of rework charged back to Work in Process. 3) Transferring the cost of completed units from Work in Process to Finished Goods. It also shows calculations for economic order quantity, reorder levels, and inventory valuation.

Uploaded by

Asad Butt
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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No 3 Solution

Yasir Bashir Elite College of Commerce

Date

Particular
W.i.p Material A/c W.i.p Labour A/c W.i.p F.O.H A/c Material Payroll A/c F.O.H Applied A/c {Cost Charged To Producer} W.i.p Material A/c W.i.p Labour A/c Material A/c Payroll A/ {Cost of rework record} Spoiled Goods A/c W.i.p Material W.i.p Labour W.i.p F.O.H {Spoiled Goods Record} W.i.p Material A/c W.i.p Labour A/c W.i.p F.O.H Material A/c Payroll A/c F.O.H A/c {Cost Charge to production} F.O.H central A/c Material A/c Payroll A/c {Cost of Work Charged to F.O.H}

L/F

Rs.
4160 2600 2600

Rs.

4160 2600 2600

100 200 100 200

90 40 25 25 4160 2600 2600 4160 2600 2600

300 100 200

Spoiled Goods A/c F.O.H central A/c W.i.p Material W.i.p Labour W.i.p F.O.H {Convert into finish goods} Finish Goods A/c W.i.p Material W.i.p Labour W.i.p F.O.H {Cost Converted in finished goods}

90 270 160 100 100

9570 4220 2775 2550

Cost of Goods Sold Finish Goods A/c {Cost of goods sold record} Account Receivable A/c Sales A/c

9510 9510

12000 12000

Cash A/c Spoiled goods A/c {Spoiled goods sale for cash} Finish goods A/c W.i.p Material W.i.p Labour W.i.p F.O.H {Converted In to Finished goods}

90 90

9000 4000 2500 2500

Cost of goods sell Finished goods {Cost of goods sold record} Account Receivable A/c Sales A/c {Units Sold} Cash A/c Spoiled Goods

9000 9000

12000 12000

90 90 {Supplementary 2006(held in January 2007)}

Q NO 4 Solution EOQ= 2 x AR x OC C.C OC=Rs.3 = 14400 CC=Rs.0.25+(5x5%)=0.25+0.25=0.5

AR=1200 EOQ=

2x1200x3 0.5

=120 Units 2-No of order per year No of order = AR/EOQ =1200 /120 Units No of order =10 Order 3-Frequency of order Frequency of order= No of days in year No of order =365/10=36 Days {Supplementary 2006 Held in January 2007}

No 5 Solution Date Particular W.i.p Material W.i.p Labour W.i.p F.O.H Material A/c Payroll A/c F.O.H A/c {Cost charged to production} W.i.p Labour W.i.p F.O.H Payroll A/c F.O.H A/c {Cost of rework record} Finish goods A/c W.i.p Material W.i.p Labour W.i.p F.O.H {Cost converts in to finish goods} W.i.p Material W.i.p Labour W.i.p F.O.H Material A/c Payroll A/c F.O.H A/c {Cost charged to production} F.O.H A/c Payroll A/c F.O.H Applied {Cost of rework record} Finish goods A/c W.i.p Material W.i.p Labour L/F Rs. 20000 10000 20000 Rs.

20000 10000 20000 1000 2000 1000 2000 53000 20000 11000 22000 20000 10000 20000 20000 10000 20000 3000 1000 2000 50000 20000 10000

W.i.p F.O.H {COST CONVERT INTO FINSISH GOODS}

20000

No 6 Solution A) Order point= maximum requirement x maximum lead time = 120kg x 7days = 840 kg B) Maximum Level = Order level mini req x mini lead time +EOQ = 840kg-(80kg x 7days) +1000kg = 840kg-560kg+1000kg =1280kg C) Minimum Level = Order level (AVG req x lead time) = 840kg (100kg x 7days) =840kg 700kg = 140kg QNo 7 Solution 1-Value of closing inventory under weighted average. Date Total Total Total Quantity Cost Cost Dec.1 180 Units 2.00 360 Dec.6 50 Units 2.00 100 Dec.12 100 Units 1.90 190 Dec.14 70 Units 2.10 147 Dec.18 40 Units 2.20 88 Dec.23 110 Units 2.30 253 550 Units 1138

Avg per units cost = Total cost/No of units

1138/550 =2.0790909 Value of closing inventory 200 units x Rs. 2.0790909 =Rs.414 2-FIFO Date Total Unit Total Quantity Cost Cost Dec.14 50 2.10 105 Dec 18 40 2.20 88 Dec 23 110 2.30 253 446 Value of closing inventory = 446 3A Corporation Income Statement For the year ended on Sale[(550-200)350units x 3] Less cost of goods sold Opening inventory Dec 1 3600 Dec 6 100 Dec 12 190 Dec 14 147 Dec 18 88 Dec 23 553 Less-closing inventory Profit

1050

1138 414

724 326

Q No 8 Solution a) Reorder level = Maximum req x Maximum lead time =150 units x 4 month =6000units b)Reorder quantity Maximum level = order level (minimum req x mini lead time)+EOQ 8400Units = 6000 units (800 units x 2 months )+EOQ EOQ = 8400 units 6000 units + 16000 units EOQ = 4000 units Q NO 9 Solution

Cost of defective work charge to same job Journal Date Details Rs. W.i.p Material 25000 W.i.p Labour 50000 W.i.p F.O.H 25000 Material A/c Factory Payroll A/c F.O.H Applied Cost Work put into process of 500 units W.i.p Material 2000 W.i.p Labour 2000 W.i.p F.O.H 1000 Material A/c Factory Payroll A/c F.O.H Applied Cost (Being cost of rework in record) Finish goods A/c W.i.p Material W.i.p Labour W.i.p F.O.H (Cost convert into finish goods) 105000

Rs.

25000 50000 25000

2000 2000 1000

27000 52000 26000

Per unit cost Per unit cost = Total Cost / No of units =105000/500 units = 210 Rs. B) Cost of rework charged to whole production Journal Date Details Rs. Rs. W.i.p Material 25000 W.i.p Labour 50000 W.i.p F.O.H 25000 Material A/c 25000 Factory Payroll A/c 50000 F.O.H Applied Cost 25000 Cost charged to production

Date

Details Rs. F.O.H control A/c 5000 Material A/c Payroll A/c FO.H Applied A/c Cost of rework charged to F.O.H Finish goods A/c W.i.p Material Labour F.O.H 100000

Rs. 2000 2000 1000

25000 50000 25000

Per units cost Per units cost = Total cost / No of units = 100000 / 500 = 200 Q No 10 Solution Reorder level = Maximum req x Maximum lead time Material A Reorder level = 60 units x 5 weeks = 300 units Material B Reorder level = 60 units x 4 weeks =240 units b) Maximum level = Maximum level = order level (minimum req x mini lead time)+EOQ Material A = 300 units (20 units x 3 weeks) + 400 units = 640 units Material B = 240 units (20 units x 2 weeks) + 600 units = 800 units c) Minimum Level = Order level (AVG req x Avg lead time) Material A = 300 {40 x (3+5/2)}

= 300 ( 40 x 4) = 140 units Material B = 240 (40 x 3) = 120 units d) Avg Stock level = Max + Mini / 2 Material A = 640 + 140 / 2 = 390 units Material B = 800 + 120 / 2 =460 units Q No 11 Solution Date Received Issued Units Rate Rs. Units Rate 200 5 1000

Rs.

Balance Units Rate Rs. 500 4 2000 500 4 2000 200 5 1000 100 200 100 100 300 4 5 400 1000

400 100 100 300 5.2 1560

4 4 5

1600 400 500

5 500 5 500 5.20 1560

Cost of material consumed = Rs. 1600 + Rs 400 + Rs. 500 = 2500 a) cost of raw material inventory = Rs 500 + Rs 1560 = Rs 2060 a)ii cost of material inventory = 1000 + 800 + 800 =2600 b) cost of raw material inventory

= 400 + 1560 =1960 Name Store Ledger Cards For the month of (LIFO) Date Received Issued Units Rate Rs. Units Rate 200 5 1000 200 5 1000

Rs.

Balance Units Rate Rs. 500 4 2000 500 4 2000 200 5 1000

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