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Embed code for: cost acc pres
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Predetermined overhead application rate (POAR)
= budgeted manufacturing overhear
Budgeted amount of cost driver
= RM 55 per machine hour
2. Prepare journal entries for the first quarter (use summary entries by combining job date).
a) The issuance of direct materials to the production and the direct labor incurred).
i. Working process inventory 170,000
Direct Materail 170,000
Working in the process inventory 288,200
wages payable 288,200
b) Manufacturing Overhead 520,000
accumulated depreciation 72,000
wages payable 140,000
material supplies inventory 150,000
other factories cost payable 293,000
c) The application of manufacturing overhead to production :
working in process inventory RM605,000
manufacturing overhead RM605,000
(25000*45) + (1500*55) + (5000+55) + (2000*55) = RM605000
d) The completion of jobs no.101 and no.102
finished good inventory 692,000
working in process in podcast 692000
Job101 = 182000+450000+80000+250*55 = 444500
Job102 = 116000+49000+15*55 = 247500
e) The sale of job no.102
Cost of goods sold-job102 247,500
finished goods inventory 247,500
ii) Cash/account receivable 319,800
sales revenue 319,800
3. Determine the cost of the job still in production as of 31 March.
Work in process inventory
1 Jan beginning bal. 298000 finished goods inventory 692000
raw material inv. 170000
wages payable 288200
manufacturing overhead605000 31 Dec ending Bal. 669200
Cost of jobs in production = RM669,200
4. Did the finished goods inventory increase or decrease during the 1st quarter ? By how much ?
Finished goods inventory increases
= 692000 – 247500
= RM 444,500
5. Was manufacturing overhead under- or overapplied for the first quarter of the year ? By how much ?
Applied manufacturing overhead = RM605000
Actual manufacturing overhead = RM520000
Overapplied overhead = 605000-520000
= RM 85,000