1 The Reading Company uses a job order costing system. The following data relate to August, the first month of the company's fiscal year. a. Raw materials purchased on account, RM210,000. b. Raw materials issued, RM190,000 (RM178,000 direct materials and RM12,000 indirect materials). c. Direct labor cost incurred, RM90,000, indirect labor cost incurred, RM110,000 d. Depreciation recorded on factory equipment, RM40,000. e. Other manufacturing overhead costs during August, RM70,000. f. The company applies manufacturing overhead cost to production on the basis of machine hour. The annual budgeted manufacturing overhead was RM3,200,000 and the annual budgeted was RM400,000. A total of 30,000 machine hours were recorded for August. g. Production orders costing RM520,000 according to their job cost sheets were completed during August and transferred to Finished Goods. h. Production orders that had costs RM480,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 25% above cost. Required: 1. Prepare journal entries to record the information given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process accounts. Post only the relevant information to each account. Show the ending balance for each account assuming the Work in Process has a beginning balance of RM42,000. 3. What happens to overhead rates based on direct labor when automated equipment and robotics replace direct labor? (Total Marks: 25 marks)