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3 marksOverheads and Manufacturing Accounts

CAPE Accounting Unit 2 · 2011 · Paper 2 · Question 1(c)(i)

Wallace Company applies manufacturing overhead based on machine hours. For 2010, estimated manufacturing overhead is 550 000 and estimated machine usage is 125 000 hours. In January 2010, actual manufacturing overhead incurred was 30 000 and 15 000 machine hours were used.

Compute the pre-determined manufacturing overhead rate for the year.

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Other parts of this question

  1. 1(a)(i)Prepare a schedule of cost of goods manufactured for the year ended December 31, 2010.[11 marks]
  2. 1(a)(ii)Calculate Horsford Company's cost of goods sold for the year ended December 31, 2010.[4 marks]
  3. 1(b)(i)Identify THREE major elements in the cost of a manufactured product.[3 marks]
  4. 1(b)(ii)Explain EACH of the following types of costs and give ONE example of EACH: a) Product cost b) Period cost c) Mixed cost[6 marks]
  5. 1(b)(iii)Distinguish between prime cost and conversion cost.[2 marks]
  6. 1(b)(iv)Identify ONE method that is used to separate mixed cost into its components.[1 mark]
  7. 1(b)(v)Explain how direct and indirect costs are typically treated in an income statement of a service organization.[3 marks]
  8. 1(c)(ii)Calculate the amount of manufacturing overhead applied during January 2010.[2 marks]

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