Question
Bigears Telco Ltd manufactures custom timber furniture. The company uses a job costing system. The following data refers to the company for the month of
Bigears Telco Ltd manufactures custom timber furniture. The company uses a job costing system. The following data refers to the company for the month of March 2014:
Overhead is applied to production using an annual predetermined overhead rate using direct labour hours.
The budgeted overhead for the current year is $1,024, 800.
Budgeted direct labour cost for the current year is $640,500. The direct labour rate is $15 per hour.
Costs incurred during March:
Direct labour costs $64,500
Indirect labour $8,000
Depreciation on factory building $35,000
Electricity $25,000
Factory rent $12,000
Other overhead costs $10,000
Sales revenue from the jobs was $180,000. The company prices jobs at manufacturing cost plus 25 per cent.
Complete the T- accounts : Raw Material Inventory (Opening Balance : 11600, Closing Balance 15600), Work in Process Inventory (Opening Balance 8000, Closing Balance 121000), Finished Goods Inventory (Opening Balance 28000, Closing Balance 18000), Cost of Goods Sold, Opening Balance 144000 and Manufacturing Overhead
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