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6.8 Hudson Limited manufactures products to customer specifications. On 1 March 20X2, the start of Hudson Limited's financial year, inventory balances were as follows: The

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6.8 Hudson Limited manufactures products to customer specifications. On 1 March 20X2, the start of Hudson Limited's financial year, inventory balances were as follows: The company applies manufacturing overheads on a machine hours basis, based on operating time. For the financial year starting 1 March 202, it was estimated that the plant would operate for 45000 machines and incur R270 000 in manufacturing overhead costs. During the year ended 28 February 203, the following transactions took place: (a) Raw materials costing R275 000 were purchased on account. COST FLOWS AND MANUFACTUAING FIAMS (b) Raw materials costing R280 000 weable dire rials costing als were indirect). 60000 (c) R220 000 were chargeable directly to orders and the remaining materiDirect labour R72 000 Indirect labour R63000 Sales commissions R90000 Administrative salaries R (he year amounted to R18000 (R13 000 of this (d) Prepaid insurance expired during the year amounted the remainder related to selling and amount related to production operations and. administrative activities). (e) Electricity and water costs of R57 000 were incu (f) Advertising costs of R140 000 were somed to R100 000. Some R800 of this amount (g) Depreciation on equipment amountion operations; the remaining R12000 was on was on equipment used in prod dministrative activities. equipment used in selling and administrative during the year. (h) The company recorded 50000 machine houre transferred into the finished goods (i) Goods costing R675 000 to manuiacture were trar warehouse. (j) Sales (all on account) to customers during the year totalled Rle of andergoods had cost R700 000 to manufact applied manufacturing overheads). Prepare joumal entries to record the transactions for the year. (Source: CIS, May 2003)

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