MGT402 ASsignment no 1 spring 11 April 2011 Solution

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[size=12]full solution in attachment[/SIZE]


Assignment of MGT402
Question No.1
Direct Labor cost =290,000
Applied FOH 30% of the Direct Labor Cost
=290000x30/100
Applied FOH=87000
Actual FOH =89760
Under Applied FOH =2760.
Adjustment to Entire Production =131.02
WIP =97.11
Finished Goods =2531.87
Cost of Goods Sold =2760
Working-1
Actual FOH = ?
Indirect Labor =46,000.00
Light & Power =4,260.00
Deprecation =4700.00
Machinery Repairs =5800.00
MISC. FOH =29,000.00
Total Actual FOH = 89760
Working -2
Cost of Goods Sold
Material Used =440,000.00
Direct Labor =290,000.00
Prime Cost =730,000.00
Indirect labor =46,000.00
Light & Power = 460.00
Depreciation =4700.00
Machinery Repairs =5,800.00
MISC. FOH =29,000.00
Total Factory Cost =819,760.00
WIP Opening =41200.00
WIP CLOSINF =42500.00
Cost of Goods manufactured =818,460.00
Finished Goods opening Balance =34,300.00
Finished Goods Closing Balance =31,500.00
Cost of Goods Sold =821,260.00
Working -3
WIP =42,500/895260x2760=131.02
Finished Goods=31,500/895260x2760=97.11
Cost of Goods Sold =821260/895260x2760=2531.87
Question No2
EOQ= SQR 2xRUxOC/ X CC%
EOQ=SQR 2x120, 000X 1,500.00 / 60X.06
EOQ=SQR 360,000,000 /3.60
EOQ=SQR 100,000,000
EOQ=10000 Units
There will be no Effect on EOQ if we reduced ordering cost & Carrying cost by 2%