(SOLVED)- Orbital Industries Ltd manufactures a variety of materials and equipment


Question Description:

$20

Orbital Industries Ltd manufactures a variety of materials and equipment for the aerospace industry. A team of P & D engineers in the firm’s Technology Park plant has developed a new material that will be useful for a variety of purposes in orbiting satellites and spacecraft. Trade-named Ceralam, the material combines some of the best properties of both ceramics and laminated plastics. Ceralam is already being used for a variety of housing in satellites produced in three different countries. Ceralam sheets are produced in an operation called rolling, in which the various materials are rolled together to form a multilayer laminate. Orbital Industries sells many of these Ceralam sheets just after the rolling operation to aerospace firms worldwide. However, Orbital also processes many of the Ceralam sheets further in the Technology Park plant. After rolling, the sheets are sent to the moulding operation, where they are formed into various shapes used to house a variety of instruments. After moulding, the sheets are sent to the punching operation, where holes are punched in the moulded sheets to accommodate protruding instruments, electrical conduits and so forth. Some of the moulded and punched sheets are then sold. The remaining units are sent to the dipping operation, in which the moulded sheets are dipped in a special chemical mixture to give them a reflective surface.
During the month of November, the following products were manufactured at the Technology Park plant (the direct material costs are also shown):
The costs incurred in producing the various Ceralam products at the Technology Park plant during November are shown in the following table.
Orbital Industries uses operation costing for its Ceralam operations at the Technology Park plant. (There were no inventories of work in process or finished goods on 1 November or 30 November.)
Required:
1. Prepare a table that includes the following information for each of the four operations:
(a) Total conversion costs.
(b) Units manufactured.
(c) Conversion cost per unit.
2. Prepare a second table that includes the following information for each product (i.e. rolled Ceralam sheets, non-reflective Ceralam housings and reflective Ceralam housings):
(a) Total manufacturing costs.
(b) Units manufactured.
(c) Total cost per unit.
3. Prepare journal entries to record the flow of all manufacturing costs through the Technology Park plant’s Ceralam operations during November. (Ignore the journal entries to record sales revenue.)
4. Construct an Excel’ spreadsheet to solve requirements 1 and 2 above. Show how the solution will change if the cost of direct material used in dipping was $45 000 and manufacturing overhead across the plant was applied at 200% of direct labour cost.

Answer

$20