Question

In: Accounting

Africa Ltd manufacture tennis racquets. The company uses the job costing system to cost its production....

Africa Ltd manufacture tennis racquets. The company uses the job costing system to cost its production. The following information relates to Poma Africa Ltd for the month of April 2020:

Schedule of costs relating to jobs in process as at 31 March 2020

Job

Direct Material

Direct Labour

Overheads

Total

A33

1050

2100

315

3465

C23

3300

5900

920

10120

Schedule of costs incurred on jobs during April 2020

Job (no of units)

Direct Material

Direct Labour

A33 (20 recquets)

2400

450

C23 (55 racquets)

11800

2300

F54 (25 racquets)

3700

690

L49(15 racauets)

1300

350

Additional information

  • Factory overheads are applied at a rate of 10% of total direct cost.
  • The only job still in process at 30 April 2020 was L49. All other jobs were completed during the month.
  • Job C23 was completed at a total cost of R25 630, this amount includes applied overhead costs of R1 410.
  • Sales during April were as follows: A33: All 20 racquets were sold at cost plus 40% mark‐up.
  • F54: 23 racquets were sold at a price of R290 per racquet. C23: All 55 racquets were sold at cost plus 35% mark‐up.
  • Actual factory overheads for April 2020 were R3 250.
  • Marketing and distribution expenses amount to R4 700 for the month of April 2020.
  • Ignore spoilage.

Required:

Round to two decimal places where necessary.

7.1 Calculate the cost of jobs A33 and F54 completed during April 2020.

7.2 Calculate the closing work‐in‐process as at 30 April 2020.

7.3 Calculate the net income for the month of April 2020.

7.4 Calculate the closing balance of finished goods as at 30 April 2020.

7.5 Calculate the over/under applied overhead for April 2020.

Solutions

Expert Solution

Africa Ltd Job costing system cost working, sales and margin working.
A33 C23 F54 L49
(20 recquets) (55 racquets) (25 racquets) 15 racauets) TOTAL
costs of jobs in process as at 31 March 2020
Direct Material 1050 3300 4350
Direct Labour 2100 5900 8000
Overheads 315 920 1235
Total 3465 10120 13585
Add: costs incurred on jobs during April 2020
Direct Material 2400 11800 3700 1300 19200
Direct Labour 450 2300 690 350 3790
Add: Factory overhead @10% applied on direct cost 600 1410 439 165 2614
TOTAL COST As at 30th April 2020 6915 25630 4829 1815 39189
Number of Recquets 20 55 25 15 115
Cost price per Racquet 345.75 466 193.16
Markep up Cost + 40% 55% NIL
Selling price per No 484.05 652.4 290
Total No of pieces sold 20 55 23
Total sales amount 9681 35882 6670 52233
TOTAL
Cost of goods sold 6915 25630 4442.68 36987.68
Marketing and distribution expenses 4700.00
Factory overhead short (2614 -3250) -11.06 -82.95 541.99
TOTAL COST As at 30th April 2020 42229.67
NET INCOME FOR THE MONTH OF APRIL 2020 10003.33
(Total sales - total cost)
7.1 Cost of jobs A33 and F54 completed during April 2020. 6915 4829
7.2 closing work‐in‐process as at 30 April 2020. 1897.95
7.3 Net income for the month of April 2020. 10003.33
7.4 closing balance of finished goods as at 30 April 2020. ( 2 Nos of F54 rackets) 375.26
7.5 Under applied overhead for April 2020. 636

ekkarill92 answered 2 years ago
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