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1) Ayesha Inc. is known for manufacturing tables. During the month of april, the two production departments had budgeted allocation bases of 4,000 machine hours
1) Ayesha Inc. is known for manufacturing tables. During the month of april, the two production departments had budgeted allocation bases of 4,000 machine hours in Department Alpha and 8,000 direct manufacturing labour hours in Department Beta. The budgeted manufacturing overheads for the month were $57,500 and $62,500, respectively. For Job A, the actual costs incurred in the two departments were as follows: (60 marks) Department Alpha Department Beta Direct materials purchased on account$110,000 $177,500 Direct materials used 32,500 13,500 Direct manufacturing labour 52,50053,500 Indirect manufacturing labour 11,000 9,000 Indirect materials used 7,500 4,750 3,750 1,250 Lease on equipment 16,250 Utilities 1,000 Job A incurred 800 machine hours in Department Alpha and 300 manufacturing labour hours in Department Beta. The company uses a budgeted indirect cost allocation rate for applying overhead to production. Required: a. Calculate with all the steps the budgeted manufacturing indirect cost allocation rate for each department. b. Prepare the necessary journal entries to summarize the March transactions for Department Aplha. c. What is the total cost of Job A?
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