Zulfiqar &Bro. Co.

It uses ABC costing the following transaction were occurred during

the April 2015
Data
Beginning inventories
Raw Material Rs. 90000
W-I-P Rs. 55000
finished goods Rs. 75000
Transaction during the month
1 Material purchased of Rs 140000 in which Rs 60000 were on
account
2 Material issued to production of Rs 95000 in which 25000 was
indirect.
3 Direct labor assigned to production Rs 70000 & indirect labor
was Rs 45000
4 Finished goods for the month were Rs 35000
5 Sales were during the month 70% of finished goods
6 Depreciation for the month on Fixed Assets costing 200000 &
depreciation changed 10%
7 Salareis for the month were Rs 120000
8 Selling @ administration expenses were Rs. 22000

The budgeted FOH were as following activity pools

S.N
o

Activity Pools

Estimated
cost

Estimated
Activities

Actual
activities

Processing units on
machine

40000

3000 Hr.

2500 Hr.

Handling material

32000

400 orders

380 orders

Testing new product

10000

100 units

120 units

Designing new
product

50000

1000 DLH

1200 DLH

Facility level

100000

10000 DLH

8500 DLH

Required:
1 Record the transaction in general Journal
2 Calculate ending inventory
3 Calculate the activity rate and total FOH
4 Adjust the over applied / Under applied FOH