QUESTION 4 Manufacturing statement and income statement
Spreadsheet. See the Spreadsheet Advice PDF in Interact2 Resources and the examples in your textbook.
See the requirements within the spreadsheet template below.
Check the assignment requirements below paying particular attention to the spreadsheet requirements. Ensure you have separate data and report areas showing only formulas. Use IF functions to allow for the possibility of either a net income or a net loss. Show row and column headings and paste both a normal view and a formula view.
The following information has been obtained from the books of Ponting Manufacturing Co. Ltd at 30 September, 20X7:
Inventories, 30/9/X6:
Finished Goods $300 000
Raw Materials 500 000
Work in Process: Material 80 000 Labour 30 000 OH Expense 20 000
Inventories, 30/9/X7:
Finished Goods 120 000
Raw Materials 70 000
Work in Process: Material 30 000 Labour 20 000 OH Expense 10 000
Summary of transactions for year
Raw material purchases 2 000 000
Inward Charges on raw materials 80 000
Direct labour 660 000
Manufacturing expense 200 000
Sales of finished goods 6 000 000
Advertising 45 000
Audit Fee 3 000
Discounts to debtors 10 000
Discounts from creditors 8 000
Cartage Outwards 20 000
Insurance 15 000
Light and power (Office) 28 000
General Expenses 25 000
Rates 30 000
Salaries (Office) 450 000
Salaries (Factory) 550 000
Travellers' Commission 150 000
Adjustments are to be made in respect of the following:
(a) Accrued expenses: Salaries (Office) $2000, Salaries (Factory) $3000
(b) Insurance paid in advance, $500
(c) Estimated taxation liability for current year, $340 000
(d) Depreciation of factory plant, $25 000
(e) Insurance and rates are to be apportioned three-quarters to the factory and one-quarter to the office.
Required: Spreadsheet.
(a) manufacturing statement for the year.
(b) income statement for the year.

QUESTION 6 Understanding the entries in the Materials Control account with GST
The Materials Control account balances were $20 000 on 1 August and $10 000 on 31 August. Raw materials issued to production during August cost $60 000. (All direct materials).
Required:
Show the Materials Control, Accounts Payable and GST Clearing accounts in the ledger for August and a general journal entry to record the cost of raw materials purchased (all on credit) during August, given that a 10% GST is paid on purchases.
QUESTION 7 Understanding the entries in the Accrued Payroll account
Salaries and wages payable to factory employees were $10 000 on 1 March and $4000 on 31 March. Gross salaries and wages paid during March totalled $40,000. March's direct labour totalled $18 000.
Required:
T-account for Accrued Payroll and general journal entries for recording salaries and wages earned by, and paid to, factory employees during March.
QUESTION 8 Payroll entries
The Ajax Company has a gross payroll of $20,000 per day. Withholdings for PAYG taxes are $6,000 per day. There are no other deductions from employees' earnings. The firm works five days per week, Monday to Friday inclusive. The payroll period covers Thursday to Wednesday inclusive and the payroll for the week is paid on the following Friday.
Gross payroll consists of $12 000 direct labour, $3000 indirect factory labour, $3000 selling expenses and $2000 general and administrative expenses each day. The following calendar should be used to answer the questions:


(a) What is the total amount to be credited to Accrued Payroll in respect of July earnings?
(b) If balance day adjustments are performed at the end of each month, what would be the balance in Accrued Payroll account at the close of business on July 31?
(c) Suppose that a single journal entry is made on the last day of each month to record the distribution of total labour costs for the month, but that entries are made each Friday to record payment of wages and withholdings. Also, PAYG taxes withheld are remitted to the Taxation Department at the end of each month.
(i) Show the weekly journal entry.
(ii) Construct the necessary ledger accounts to show all entries in respect of labour costs during the month of July.
QUESTION 9 Activity Based Costing
Your employer is contemplating changing the existing traditional costing systems used in the business to adopt activity based costing (ABC). See your text page 81.
Prepare a business report outlining the traditional costing system and evaluate arguments for and against ABC. Use the Internet as a resource and academic journal articles (about 400 words excluding references). The following CSU resource will help you prepare and format your report:eportfolio.csu.edu.au/pebblepad/viewasset.aspx
Or see this resource. unilearning.uow.edu.au/report/4b.html
QUESTION 10 Service department cost allocation
Review the examples in your textbook.
Direct, step and reciprocal methods of overhead allocation: moderately difficult
A company has two production departments (Component Manufacture and Assembly) and two service departments (Staff Cafeteria and Materials Handling). The budgeted costs of these departments are:
Component Assembly Cafeteria Materials Handling
Manufacture $ $ $ $
Direct (to centre)
Material & labour 200 000 150 000 5 000 15 000
Indirect costs 120 000 110 000 3 000 5 000

The services of the Cafeteria are allocated according to the number of employees in the other departments: Materials Handling has 20 employees, Component Manufacture 50 employees and Assembly 40 employees.
The services of the Materials Handling department are allocated according to the number of budgeted requisitions per period. These are estimated as 30 for the Cafeteria, 40 for Component Manufacture and 30 for Assembly.
Required:
Allocate service department costs to the production departments using
(a) the direct method
(b) the step method
(c) the reciprocal services method.
You can choose if you wish to answer with a spreadsheet. Or not.

Rationale
This assignment assesses your achievement of learning outcomes including the application of cognitive skills in the design and operation of costing systems; the design and operation of performance management systems including manufacturing statements, job costing systems, ABC and service department cost allocation; the role of management accounting in organisational contexts and the implications for management accounting of different paradigms; the application of analytical and synthetical skills in report writing; quantitative techniques and computer software including using the Internet as a professional source; the creation and implementation of computerised decision models; and to critique how managers make decisions.
In particular, this assignment is designed to assess your application of knowledge, understanding and skills in certain topics including cost flows in management accounting, functions, terminology, manufacturing statements, spreadsheet construction, product costing, materials acquisition systems, labour payment systems, accounting for overhead, business report writing, activity based costing, (ABC) and the allocation of overhead including service department costs.