acc201 tma

ACC203e
Managerial Accounting
Group-Based Assessment

January 2011 Presentation

Lecture Group T01
Mr Wong Nee Tat

Names
Chen Yawen Gwendolin(Y1072354)
Chng Chyi Da (K1115100)
Teo Zhen Wei (Z1010291)

Question 1 UrPrint Job U12 Cost Sheet $
Direct Materials:
Plain t-shirts 4,800
Paints 1,400
Design & making of silk-screen 2,000

Direct Labour:
600 t-shirts1 4,200

Factory Overhead2 840

Additional Costs:
Correction of silk-screen 100
White paint 20
20 t-shirts replaced3 160
Labour on 60 t-shirts4 200
Overhead on 60 t-shirts5 40
Cost incurred on reworked t-shirts6 20
Sale of reworked t-shirts7 -200
Job transfer to U26 -160

Total Costs 13,420

Total Units 600
Cost per Unit $22.37

Workings
1) Direct Labour
= 7 x 600
= $4,200

2) Factory Overhead
= 20% x 4200
= $840

3) T-shirts replaced
= cost per t-shirt x 20
= (4800/600) x 20
= 8 x 20
= $160

4) Additional labour incurred on t-shirts
= labour on reworked t-shirts + labour on replacement t-shirts
= 60 + (7 x 20)
= $200

Question 1

Workings
5) Overhead incurred on additional labour
= 20% x 200
= $40

6) Cost incurred on reworked t-shirts
= 20 x 1
= $20

7) Sale of reworked t-shirts
= 20 x 10
= $200

Question 2
(i)
The number of t-shirts used is more than the total units for job U12. Thus it is not accurate to say the cost is a true product cost. A more accurate cost will be to include the t-shirts that are burnt or reworked.

(ii)
Direct materials and labour can be traced directly to the product but factory overhead is just an estimate over direct labour. Factory overhead cannot be traced directly to the product. When a cost is an estimate, it is not a true product cost.

(iii)
If the true cost could be determined, each t-shirt produced in a period will have a different value. Thus, we can say that the unit cost computed is an