Problem 1 Bigglesby Ltd manufactures trailers. The following information has been taken from the company accounts for the year to 30 June. Direct materials used $120,000 Direct Labour $30,000...

Problem 1
Bigglesby Ltd manufactures trailers.
The following information has been taken from the company accounts for the year to 30 June.
    Direct materials used
    $120,000
    Direct Labour
    $30,000
    Conversion Costs
    $80,000
    Selling and Administration Expenses
    $70,000
    Financial Expenses
    $30,000
Please calculate the following
(a) Prime Cost
(b) Factory Overhead Cost
(c) Total Cost of Goods Manufactured
(d) Total Period Costs
    a) Calculation of prime cost
    Direct material used = $120,000
    Direct labour =$30,000
    Prime cost = $150,000
    
    b) Calculation of factory overhead costs
    Conversion costs = $80,000
    Factory overhead costs = $80,000
    
    c) Calculation of total cost of goods manufactured
    Prime costs = $150,000
    Conversion costs = $80,000
    Total cost of goods manufactured = $230,000
    
    d) Calculation of total period costs
    
    Selling and administration expenses = $70,000
    Financial expenses =$30,000
    Total period costs = $100,000
    
    
    
    
    
    
    
    
Problem 2
Complete in journal entry form for each of the following related transactions.
Assume in each case that the general ledger is used.
Opening balance of raw materials was $40,000
Opening balance of work in process was $10,000
Opening balance of finished goods was $50,000
    Purchase of materials on account (exc GST)
    $30,000
    Issue of direct materials to jobs in process
    $50,000
    Indirect materials issued
    $7,000
    Inspected material found faulty and returned to suppliers
    $2,000
    Direct labour charged to production
    $25,000
    Indirect labour
    $3,000
    Factory labour payroll (including tax withheld $3,000)
    $28,000
    Depreciation 20% pa straight line (Cost $75,000)
    ?
    Factory overhead applied to production at rate of 100% of direct labour cost
    
    The cost of goods produced transferred to finished goods store in the period
    $100,000
    Sale of all finished goods for cost plus 100%
    
After completing journal entries, determine the closing balance of Raw Materials, Work in Process, Finished Goods and Factory Overhead Applied account.
EXAMPLE FORMAT                        Dr.        Cr.
    Raw Materials Control 30,000
    GST paid 3,000
     Accounts Payable 33,000
     Purchase of materials on account
    
    Work in process control 50,000
     Raw material control 50,000
     Transfer of material to job in process
    
    Overhead ...