3 Oasis Industries manufactures unique custom made tiny homes. At the start of its most recent fiscal year, the 4 company's inventory balances were as follows: Raw materials: 6 7 8 Work-in-process: Finished goods: $69,000 $252,000 $318,000 The company applies overhead cost to jobs on the basis of direct labour-hours worked. For the year 2021, 10 the company estimated that it would work 60,000 direct labour hours and 120,000 machine-hours and incur 11 $1,440,000 in manufacturing overhead cost. The following transactions were recorded in 2021: 12 13 a) Raw materials costing $960,000 were purchased from suppliers on account. 14 15 b) Of the raw materials that were issued into production 80% were direct raw materials and 20% were 16 indirect raw materials. The ending raw material inventory on December 31, 2021 was $90,000 17 18 c) Costs for employee services were as follows: 19 220 21 22 Assembly line (direct labour) workers Factory maintenance (indirect labour) Selling and administration salaries $1,462,500 $468,000 $369,000 23 d) Advertising costs were incurred at $337,500 24 25 e) Property tax expense during the year was $144,000. Of this $79,500 related to the operation of the 26 factory and the remainder to selling and administration. 27 28 ) Utilities cost for the year was $282,000. Of this 85% related to the operation of the factory and the 29 remainder to selling and administration. 30 31 g) Depreciation recorded for the year was $330,000. (80% factory, the balance to selling and 32 administration). 33 34 h) Other operating expenses incurred totaled $252,000. Other factory costs incurred totaled $109,500 35 36 1) 37 Jobs costing $3,570,000 were sold during the year for $6,300,000. j) Manufacturing overhead was applied to production. A total of 125,250 machine hours were worked 38 during the year. F G H 3 Other Information: 41. The corporate income tax rate is 26%. 5 II. The predetermined overhead application rate has remained the same for the past two years. 6. The actual direct labour rate of $25 per hour has remained the same for the past two years. 7 iv. The ending work in process inventory on December 31, 2021 consisted of Job#265. Direct materials of 8 $67,500, 2,700 actual direct labour hours and 10,500 actual machine hours had been incurred on this job. 49 50 51 Required: 52 1. Calculate the following: 53 a. MOH rate (1 mark) 54 55 56 57 b. Actual DL hours (1 mark) 58 59 60 C. Applied MOH (1 mark) 61 62 63 64 65 66 67 d. Ending work in process inventory. (2 marks) 68 2. Record 2021 transactions (including the opening and closing balances) in the following "T" accounts (16 marks) 3 a) Raw Materials 4 b) Work in process 5 c) Finished Goods 6 d) Manufacturing Overhead 7 e) Coslof Goods Sold 8 f) Sales 79 g) Operating expenses 80 81 82 Raw Materials Work in Process. 83 84 85 86 87 88 89 90 91 MOH Finished Goods 92 93 94 95 96 97 98 99 100 101 Operating expenses Cost of goods sold 102 103 104 105 106 0 1 Operating expenses Cost of goods sold 2 03 04 05 06 07 08 09 10 111 Sales 112 113 3. Prepare the journal entry to adjust any under or over applied overhead according to IAS# 2 and post it t 114 the respective T-Accounts. Adjust the 3 accounts impacted,and MOH......... (6 marks) 115 116 117 118 119