Topic 2 Tutorial Solutions STUDENT Moodle

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ACCT 2511
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Accounting
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Oct 21, 2023
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CRICOS Provider Code 00098G UNSW Business School School of Accounting, Auditing & Taxation business.unsw.edu.au Last Updated 15/3/2021 ACCT2511 - Financial Accounting Fundamentals Topic 2 - Inventory Tutorial Question Answers Trotman, Humphreys, Clout & Morgan 7th customised edition Part 2: Problem 12.3 Problem 12.6 - Parts (1), (2) and (4) only Problem 12.13 Or Trotman, Carson & Morgan 7th ed 2019 (TCM): Problem 9.4 Problem 9.7 - parts (1), (2) and (4) only Problem 9.13 Discussion Starter for Tutorial: Additional Question 1 (1) Describe the two main costing systems used by manufacturers to assign costs to cost objects, and explain how the two approaches differ. (2) For each of the two costing systems, provide at least one example of a product that would be best suited to that system.
Page 2 Discussion Starter for Tutorial: Additional Question 1 Answer: Job-order costing and process costing systems . For job-order manufacturing systems, manufacturing costs are accumulated for each job. In a job-order firm, collecting costs by job provides vital information for management. Once a job is completed, the unit cost can be obtained by dividing the total manufacturing costs by the number of units produced. irms in process-based environments mass-produce large quantities of very similar or homogeneous products. Each product is essentially indistinguishable from its companion product. Process firms accumulate production costs by process or by department for a given period of time. The output for the process for the same period of time is measured. Unit costs are computed by dividing the process costs for the given period by the output of the period. (1) Job-order costing - some product (cost object is the product) examples: Jet-fighter planes that are custom ordered Luxury boats that are custom designed Airplanes that have been custom created for airlines Process costing -product cost object examples: Juice, soft drink (mass produced) Crude oil
Page 3 Q2. THCM Problem 12.3 /TCM Problem 9.4 Please note: the year and company name is the only difference between these questions. In TCHM it is Topaz Ltd in 2022, and in TCM it is Bragg Ltd in 2019. 1 Topaz/Bragg Ltd General journal a Perpetual inventory DR$ CR$ Inventory 110 000 Accounts payable 110 000 Accounts receivable 180 000 Sales revenue 180 000 Cost of goods sold expense 120 000 Inventory 120 000 COGS: 50% mark-up 180 000 x 100/150 = $120 000 Inventory shortage expense 1 400 Inventory 1 400 Shortage: record indicates inventory should be $30 000 + $110 000 - $120 000 = $20 000 but only $18 600 is on hand Operating expenses 35 000 Cash 35 000 Profit and loss summary 156 400 Cost of goods sold expense 120 000 Inventory shortage expense 1 400 Operating expenses 35 000 Sales revenue 180 000
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