Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Cost Accounting Expert

Timbatown Pty Ltd is the distributor of timber tables and chairs. Company mainly sells on a retail basis to household consumers, but occasionally receives large orders for tables and chairs from schools and businesses. Management uses the first-in-first-out inventory assumption, despite the inventory cost being fairly stable throughout the year. As each item is ready, it is stamped underneath with the batch number and cost code. Information about inventory for the past month is presented below:

In stock at 1 June 2012:

26 tables    Costs:     Purchase price    :     $440 per table (GST inclusive)
            Assembly:                                  $197 per table (GST exclusive)
            Insurance in Tra nsit                    $44 per table (GST inclusive)
                   Freight in:                           $22 per table (GST inclusive)

     94 chairs    Costs:     Purchase price:    $110 per chair (GST inclusive)
                           Assembly:                   $112 per chair (GST exclusive)
                   Freight in:                           $22 per chair (GST inclusive)

During June 2012, the following tables and chairs were produced:

35 tables    Costs:         Purchase price:    $396 per table (GST inclusive)
           Assembly:                                  $197 per table (GST exclusive)
                        Insurance in Transit        $44 per table (GST inclusive)
                 Freight in:                            $22 per table (GST inclusive)
 
116 chairs    Costs:     Purchase price:       $99 per chair (GST inclusive)
            Assembly:                                 $112 per chair (GST exclusive)
                 Freight in:                            $22 per chair (GST inclusive)
   

The following sales were recorded during June 2012:

40 tables @ $990 each (GST inclusive)
120 chairs @ $330 each (GST inclusive)

Stock-take on 30 June 2012 revealed that two tables and eight chairs were scratched. Their selling price would require to be reduced to $660 and $165 respectively (GST inclusive).  All other items in stock will be sold at the retail price charged during June. The business has a special offer where free delivery is included with every sale. Standard delivery cost is $22 per item (GST inclusive).

Required:

a) Prepare a partial income statement for June (down to gross profit). Show all workings.

b) Prepare the general journal entry(ies) to record any inventory prepare down.

c) Find out the value of each type of inventory at 30 June 2012 in accordance with AASB 102 Inventories. Justify all parts of the answer and show calculations.

d) Timbatown Pty Ltd uses the first-in-first-out assumption for its inventory. Comment on whether you think the alternative approaches of specific identification or average cost can be used by Timbatown Pty Ltd instead of first-in-first-out.

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M9677

Have any Question? 


Related Questions in Cost Accounting

Polarisreading the case and answer the all question polaris

Polaris Reading the case and answer the all question: Polaris: Suggested assignment questions Why does the Polaris outsource the manufacture of most components but in-source final assembly? Which manufacturing location o ...

Case questionsmarriott corporation the cost of capital

Case Questions Marriott Corporation: The Cost of Capital (Abridged) 1. What is the weighted average cost of capital for Marriott Corporation? a. What risk-free rate and risk premium did you use to calculate the cost of e ...

Company expansion - internationallocate the financial

Company Expansion - International Locate the financial information for a company that has only domestic manufacturing operations. Assume management desires to expand into the global market with its current products. The ...

Discuss cost management as a professionname three

Discuss cost management as a profession Name three professional cost management organizations and explain their roles. Where in the corporate, not for profit, areas would cost accountants work and what types of work woul ...

Cost accountingquestion 1 which of the following statements

Cost Accounting Question 1. Which of the following statements regarding differential costs is (are) false? (A). The full cost fallacy occurs when a decision-maker fails to include fixed manufacturingoverhead in the produ ...

Write 500 words that respond to the following

Write 500 words that respond to the following questions: • Discuss what absorption, variables, and throughput costing are. • Determine when each would be used. • Provide an explanation and example of all three.

Cost accounting- little debbie brownieshere is a copy of

Cost Accounting- Little Debbie Brownies Here is a copy of the assignment. My snack of choice is the Little Debbie Fudge Brownies Comprehensive Product Costing Select your favorite drink or snack item manufactured by a pu ...

Problem 1 master budgetomega inc has developed the

Problem 1: Master Budget Omega, Inc. has developed the following sales forecast for the first six months of the coming year Month Sales (in units) January 30,000 February 50,000 March 70,000 April 80,000 May 60,000 June ...

Questionyou are just from attending a conference on

QUESTION You are just from attending a conference on Activity Based Costing (ABC) and you now wish to put your knowledge to practice by applying the principles of ABC to the four products currently made and sold by your ...

Quiz1 a process cost system would be used for all of the

QUIZ 1 A process cost system would be used for all of the following products except computer chips. chemicals. motion pictures. soft drinks. 2 Differences between a job order cost system and a process cost system include ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen