Question

SL Management accounting information Assessment task 1 HL01- Question 4 The Floral Co makes timber chairs. There are two styles of chairs: plan and painted. There are three (3) departments: Cutting, Assembly and Painting. The timber for the plain and the painted chairs is cut in the cutting department. The cut timber is then assembled before the chairs to be painted are transferred to the painting department. Details for October are: Direct Materials: Batch 126 (400 plain) Batch 127 (600 painted) - Cutting - Painting 2,000 3,000 600 5,600 Direct Labour: Cutting Assembly Painting 1,700 2,500 1,200 5,400 Factory overhead (applied) Cutting Assembly Painting Total Costs 2,040 2,000 1,200 5,240 16,240 Required: (a) Calculate the cost per unit for each style of chair (round to 2 decimal places) (b) Calculate the total costs for each of the two batches produced (126 and 127 (c) Prepare the general journal entries required for the costs in the Cutting Department and the transfer out to the other departments. (d) How would you will make sure that the data is recorded & stored securely?

Answer 1

d ia Calculaton of Cost of each chair Plain Painted. Matenal. - 1200 painting Cutting 1200 Labour -cet 680 1020 __ Ass loco 1800 Paint 1200 1800 Overheads accething 816 800 1224 1200 1200 - Paint 5296 400 10au4 690 No of Units Peronit 13-24 18.24 ☺ Total cost of each bateh <labe $ 5296 127 $10944 Crolet Journal Entries Debit Cutting Expens. Alcoy 3000 To plain chair To Painted Chair Being, Expenses Transfered) from material 1200 1800 -

(6) - (c) Cutting Exp labour Dr 1700 To Plain chair :880 To Painted chair 102D (Being amount troostered to Respecfive Departments) Cutting overheads Dy 2040 To plain chair To Paintea chair 1224 CBeing amount transtcoca to Respeeble Dept) To ensure proper record and securely -Perpectualor penodic systm of inventory Conbol should be tollowed 816