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# Accounting

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Fred and Frank’s Fine Furniture and Fancy Fixture Fabricating Limited uses a job-order costing system and applies overhead based on direct labour hours. The company has an October 31 fiscal year end. On October 1, Fred and Frank’s accounting records indicated the following: Job 626 Direct materials Direct labour Applied overhead Job status at Sept. 30 \$1,000 1,000 1,500 In process Job 627 700 850 1,275 Finished \$ Job 630 400 40 60 In process \$

The following jobs were started during the month of October 1993: October Direct Labour Hours Job 631: Job 632: Job 633: 25 30 10 October Direct Material Used (DM) 20% of total DM used in October 35% of total DM used in October 25% of total DM used in October

The remaining direct materials used in October were attributable to Job 630, on which direct labourers worked 40 hours in October. On September 30, Job 626 was complete as to materials, but was only 40% complete as to conversion costs. This job was completed and sold during October. Job 631 was the only other job sold during October. Jobs 630 and 633 were the only jobs still in process at year end. Other items relating to the factory for October included: Direct materials purchased Utilities Indirect materials purchased Depreciation Indirect labour Other overhead Indirect materials used \$14,000 1,000 2,000 3,000 1,000 8,000 1,000

The balance in the raw materials account was \$5,000 on September 30 and \$6,000 on October 31. All direct labourers are paid \$20 per hour and all jobs are sold at 150% of total cost. Any under- or overapplied overhead is closed to cost of goods sold at the end of each fiscal year.

Required: (a) Calculate the predetermined overhead rate per direct labour hour.

(b)

Ignore your answer in (a) above and assume for all the remaining questions that the predetermined overhead rate per direct labour hour is \$25. (i) Prepare the raw material control T account for the month of October to determine the total amount of direct material used in production during October. Ignore your answer in (i) above and assume that the total amount of direct material used in production during October is \$10,000. Prepare the WIP control T account for October, and WIP T accounts for Jobs 626, 630, 631, 632 and 633.

(ii)

(c)

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