ASSIGNMENT-2 5% IN THE FINAL GRADE DUE before October 13th, 2021 @11.59 PM Problem:1 The Golden Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of materials used in production. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined overhead rate for the year: Manufacturing overhead cost: S200,000 Direct materials cost: S160,000 The following transactions took place during the year (all purchases and services were acquired on account): a.) Raw materials purchased: $86,000. b.) Raw materials requisitioned for use in production (all direct materials); $98,000. c.) Utility costs incurred in the factory: $15,000. d.) Salaries and wages incurred as follows: Direct labour: $175,000 Indirect labour: $70,000 Administrative salaries: $125,000 e.) Maintenance costs incurred in the factory: $15,000. f.) Advertising costs incurred: $89,000. g.) Depreciation recorded for the year. $80,000, of which 80% relates to factory assets and the remainder relates to selling and administrative assets. h.) Rental cost incurred on buildings: $70,000 (75% of the space is occupied by the factory, and 25% is occupied by sales and administration) 1.) Miscellaneous selling and administrative costs incurred: $11,000. j.) Manufacturing overhead cost was applied to jobs as per company policy k.) Cost of goods manufactured for the year: $500,000. 1.) Sales for the year all on account): S1,000,000. These goods cost $600,000 to manufacture. Required: Prepare journal entries to record the information above. administration). 1.) Miscellaneous selling and administrative costs incurred: $11,000 j.) Manufacturing overhead cost was applied to jobs as per company policy k.) Cost of goods manufactured for the year: $500,000. 1) Sales for the year (all on account): $1,000,000. These goods cost $600,000 to manufacture. Required: Prepare journal entries to record the information above. Problem.2. X Company reported the following actual cost data for the year: Purchase of raw materials (all direct) $266,000 Direct labour cost 160.000 Manufacturing overhead costs 246,000 Change in inventories: Decrease in raw materials $10,000 Decrease in work in process 8.000 Decrease in finished goods 16,000 X Company used a 150% predetermined overhead rate based on direct labour cost. The rate was based on annual estimated overhead cost and direct labour cost of S252,000 and $168,000, respectively. Required: a. Calculate the cost of goods manufactured. b. What was the cost of goods sold before adjusting for any under or overapplied overhead? c. By how much was manufacturing overhead cost under or overapplied? d. Prepare a summary journal entry to close any under or overapplied manufacturing overhead cost to cost of goods sold. Is such an entry appropriate in this situation? Why or why not? e. Analyse the under or overapplied manufacturing overhead costs calculated in part c above into two separate components: amount due to incorrect estimate of the annual manufacturing overhead costs and an amount due to incorrect estimate of the annual direct labour cost
