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17 marksOverheads and Manufacturing Accounts

CAPE Accounting Unit 2 · 2002 · Paper 2 · Question 1(a)(i)

Magna Greenhouse Inc. prepared an incorrect income statement showing an operating loss of $18,000 for 2001. Additional details are provided regarding factory proportions of utilities (60%), rent (70%), and insurance (80%), along with beginning and ending inventory values for raw materials, work in process, and finished goods.

Prepare a schedule of cost of goods manufactured, taking into account the information contained in the income statement and the additional information provided.

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Other parts of this question

  1. 1(b)(i)Calculate the total relevant costs of EACH job.[7 marks]
  2. 1(b)(ii)Calculate the incremental profit or loss associated with the acceptance of the Portland job.[3 marks]
  3. 1(b)(iii)Calculate the incremental profit or loss associated with the acceptance of the Westmoreland job.[3 marks]
  4. 1(b)(iv)Discuss TWO additional factors which the company should consider in deciding whether to accept or reject these jobs.[5 marks]

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