Sino-woodworks Ethiopia Ltd makes office furniture from fine

Sino-woodworks Ethiopia Ltd makes office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine-hours and the rate in the Fabrication Department is based on direct materials cost. At the beginning of the year the companys management made the following estimates for the year: Job-C was started on April 1 and completed on May 12. The companys cost records show the following information concerning the job: Required: a) Compute the predetermined overhead rate used during the year in the Preparation and Fabrication Departments. b) Compute the total overhead cost applied to Job-C. c) What would be the total cost recorded for Job-C? If the job contained 25 units what would be the unit product cost? d) At the end of the year the records of the company revealed the following actual cost and operating data for all jobs worked on during the year: What was the amount of under-applied or over-applied overhead in each department at the end of the year? —————————————————————————————————————————————— 3 | P a g e 3. Sino-electronics East-Africa Ltd manufactures electric meters for sale to its African and Middle-East customers. The product goes through three departments. The following information is available for the first department during June 2014. Required: Assume that the company uses the weighted-average process costing. a) Determine the equivalent units for June for the first process. b) Compute the costs per equivalent unit for June for the first process. c) Determine the total cost of ending work in process inventory and the total cost of units transferred to the second process in June. d) Reconcile the total costs assigned to the ending work in process inventory and the units transferred out with the costs in beginning inventory and costs added during the period. 4. Sino-Afro Electronics manufactures different optical switch for networking uses in different industries. During 2013 the company completed an order for a special optical switch for a new customer Ethio-telecom. This customer did not order any other products during the year. Data concerning that order follow: Data related to Ethio-telecom order Selling price $295 per unit Units ordered 100 units Direct materials $264 per unit Direct labor hours 0.50 hrs per unit Direct labor rate $25 per direct labor hr Currently the company is concerned whether to accept this special order thus contracts your professional advice. The company traditionally uses direct labor hours to allocate manufacturing overhead costs. Total direct labor hours was estimated to be 20 000 in 2013. Other operating data for the year 2013 is provided in the following table. Note that 80% of the overhead costs are related to production while the remaining 20% are selling and administrative. —————————————————————————————————————————————— 4 | P a g e Required: a) Shall the company accept the special order if the traditional costing system is in use? Why? b) Shall the company accept the special order if activity-based costing system is in use? Why? c) Does the costing system affect your advice regarding acceptance of the special order