90.2K

Verified Solution

Link Copied!

Question 6(55 marks) Delta Construction Limited tendered for a job to build a Conference Room at Jamaica Trading Limited located at 36 constant spring Road Kingston 10. The job was advertised in the Sunday Gleaner on March 31,2023, for interested companies to tender for the job, by submitting a detailed Job Costing Information no later than April 10, 2023. The Chief Technical Director Mr. Mark Williamson instructed his senior Cost and procurement Officer Mark Pryce to prepare a detailed Job Costing report for the project which must be delivered to Jamaica Trading Limited before the due date, the job number is 47 The cost for completing the project is estimated as follows: Direct materials will cost $8,650,000. Twelve workers will be required for the job for Four weeks for 40 hours each week. Eight of the employees are highly Skilled Workers and will be paid a rate of $8,850 per hour and the other employees are Semi-Skilled workers will be paid a rate of $5,700 per hour. All twelve (12) employees are directly involved in the project. Delta Construction Limited also engaged the services of a heavy-duty Machine to work directly on the project for 40 hours at a rate of $12,500 per hour. Other expenses include budgeted fixed cost, which is estimated for $1.650,000. A consultant will be hired for 30 hours at a rate of $12,500 per hour, this is to be treated as direct labour hours when calculating the direct overhead expenses. The company recovers overhead and administrative expenses on the basis of direct labour hours at a rate of $7,700 per hour. A profit margin of 30% is to be added to the cost of the job. Jamaica Trading Limited accepts the quotation and Delta Construction Limited carries out the construction of the Conference Room. When the job was completed, the Actual cost incurred were as follows: Direct material $9,830,000, direct labour hours Highly Skilled workers 1305 hours and semi skill workers 624 hour. Machine was engaged for 46 Hours, the consultant worked for 28 hours. JDF/ACCOUNT LEVE 3 PLA/'MAY 2023 12 Requirements: a. With the aid of a spread sheet use the above information to create a debtor's aging schedule with the additional columns if necessary. (35 marks) b. Draft a sample of an appropriate letter which the accountant could sent to Karen White to make payment on his accounts (10 marks) c. Show the entries for the total amount of provisions for bad debt to be created. (5 marks) Base on the rate of inflation and other economic factors direct overhead expenses was absorb at a rate of $8,400 per hour base on the company policy use to recover overhead expenses. Required: a. Prepare the job sheet clearly showing the estimated cost for completing the job. (15 Marks) b. Prepare a table showing the estimate and actual production cost also a computation of the variance associated with the project. (30 Marks) c. Prepare a report for management explaining -- the reasons for the variance on the job costing report submitted to Jamaica Trading Limited. (10 marks) Question 7 ( 50 marks) Carlene Johnson is the Accountant in the Finance Department at Fairway Trading Limited who manages the company Accounts Receivables. She was given the following information by the Finance Manager which was extracted from the debtor's ledger as at December 31, 2022. \begin{tabular}{|l|l|l|l|l|l|} \hline CategoryofCustomers & TotalvalueofSalesToCustomer$ & Date of Sales & Terms & DateofLastPaymentonA/C & TotalAmountPaidtoDateonAccount$ \\ \hline Keith Green & 180,0000 & December16,2021 & 30 days & January15,2022 & 90,500 \\ \hline Karen White & 240,000 & December10,2021 & 60 days & February14,2022 & 180,000 \\ \hline June Hinds & 390,000 & November15,2022 & 30 days & December20,2022 & 170,000 \\ \hline John Wayne & 380,000 & June26,2022 & 30 days & October24,2022 & 295,000 \\ \hline Paul Gayle & 346,000 & August25,2022 & 30 days & September24,2022 & 235,000 \\ \hline \end{tabular} The Accountant decided that she would age the debt outstanding in the following category and the percentage to be provided for bad debt in the amount stated beside each category accordingly. \begin{tabular}{|l|l|} \hline Aging Category & Percentageprovisiontobecreated \\ \hline \end{tabular} JDF/ACCOUNT LEVE 3 PLA/ /MAY 2023 EASTERN TVET INSIT: STONY HILL CAMPU =13 APPROVEOA, 1512023 Question 6(55 marks) Delta Construction Limited tendered for a job to build a Conference Room at Jamaica Trading Limited located at 36 constant spring Road Kingston 10. The job was advertised in the Sunday Gleaner on March 31,2023, for interested companies to tender for the job, by submitting a detailed Job Costing Information no later than April 10, 2023. The Chief Technical Director Mr. Mark Williamson instructed his senior Cost and procurement Officer Mark Pryce to prepare a detailed Job Costing report for the project which must be delivered to Jamaica Trading Limited before the due date, the job number is 47 The cost for completing the project is estimated as follows: Direct materials will cost $8,650,000. Twelve workers will be required for the job for Four weeks for 40 hours each week. Eight of the employees are highly Skilled Workers and will be paid a rate of $8,850 per hour and the other employees are Semi-Skilled workers will be paid a rate of $5,700 per hour. All twelve (12) employees are directly involved in the project. Delta Construction Limited also engaged the services of a heavy-duty Machine to work directly on the project for 40 hours at a rate of $12,500 per hour. Other expenses include budgeted fixed cost, which is estimated for $1.650,000. A consultant will be hired for 30 hours at a rate of $12,500 per hour, this is to be treated as direct labour hours when calculating the direct overhead expenses. The company recovers overhead and administrative expenses on the basis of direct labour hours at a rate of $7,700 per hour. A profit margin of 30% is to be added to the cost of the job. Jamaica Trading Limited accepts the quotation and Delta Construction Limited carries out the construction of the Conference Room. When the job was completed, the Actual cost incurred were as follows: Direct material $9,830,000, direct labour hours Highly Skilled workers 1305 hours and semi skill workers 624 hour. Machine was engaged for 46 Hours, the consultant worked for 28 hours. JDF/ACCOUNT LEVE 3 PLA/'MAY 2023 12 Requirements: a. With the aid of a spread sheet use the above information to create a debtor's aging schedule with the additional columns if necessary. (35 marks) b. Draft a sample of an appropriate letter which the accountant could sent to Karen White to make payment on his accounts (10 marks) c. Show the entries for the total amount of provisions for bad debt to be created. (5 marks) Base on the rate of inflation and other economic factors direct overhead expenses was absorb at a rate of $8,400 per hour base on the company policy use to recover overhead expenses. Required: a. Prepare the job sheet clearly showing the estimated cost for completing the job. (15 Marks) b. Prepare a table showing the estimate and actual production cost also a computation of the variance associated with the project. (30 Marks) c. Prepare a report for management explaining -- the reasons for the variance on the job costing report submitted to Jamaica Trading Limited. (10 marks) Question 7 ( 50 marks) Carlene Johnson is the Accountant in the Finance Department at Fairway Trading Limited who manages the company Accounts Receivables. She was given the following information by the Finance Manager which was extracted from the debtor's ledger as at December 31, 2022. \begin{tabular}{|l|l|l|l|l|l|} \hline CategoryofCustomers & TotalvalueofSalesToCustomer$ & Date of Sales & Terms & DateofLastPaymentonA/C & TotalAmountPaidtoDateonAccount$ \\ \hline Keith Green & 180,0000 & December16,2021 & 30 days & January15,2022 & 90,500 \\ \hline Karen White & 240,000 & December10,2021 & 60 days & February14,2022 & 180,000 \\ \hline June Hinds & 390,000 & November15,2022 & 30 days & December20,2022 & 170,000 \\ \hline John Wayne & 380,000 & June26,2022 & 30 days & October24,2022 & 295,000 \\ \hline Paul Gayle & 346,000 & August25,2022 & 30 days & September24,2022 & 235,000 \\ \hline \end{tabular} The Accountant decided that she would age the debt outstanding in the following category and the percentage to be provided for bad debt in the amount stated beside each category accordingly. \begin{tabular}{|l|l|} \hline Aging Category & Percentageprovisiontobecreated \\ \hline \end{tabular} JDF/ACCOUNT LEVE 3 PLA/ /MAY 2023 EASTERN TVET INSIT: STONY HILL CAMPU =13 APPROVEOA, 1512023

Answer & Explanation Solved by verified expert

See Answer