Boeing Company manufactures batteries and uses job - order costing system. For the current year, the manager of the company estimated that the company would need 80,000 machine hours and incur a fixed manufacturing overheard cost $325,000 and a variable manufacturing overhead cost of $7.5 per machine hour. Boeing Company had beginning inventory as follows :

Raw Material WIP

Finished Goods

$14,000 $12,400 $20,000

The following information relates to operation in the current year. The raw materials purchased include both direct and indirect materials. Assume that all transactions were on account.

Purchase of Raw Materials $1516,000 (70 % Direct and 30% Indirect)

Raw material requisitioned for the use in production Direct : $1070,000 . Indirect : $230,000

Labour cost Direct : $33.5 per hr. Indirect : $18 per hr

Salary for office employees $40,000

Deprecation on Factory Building $220,000

Depreciation on Corporate Building $180,000

Utility cost $100,000 (65% relates to factory and the rest relates to corporate)

Factory Machinery Maintenance Cost $15,000 Advertising Expense $20,000

Rent $200,000 (70% relates to factory and the rest relates to corporate)

Additional Information:

- The direct labours worked a total of 9,300 hours. The indirect labours worked for a total of 11,300 hours.

- Manufacturing overhead was applied to production. The company received lesser than expected orders during the year for which the machines ran for a total of 70,000 hours.

- During the year, a total of 46,000 units of batteries were manufactured and transferred to finished goods , out of which 43,000 were sold to customers at the selling price of $70 per battery.

Required :

a. Use the information given above to write the appropriate journal entries for Boeing Company. (20 marks)

b. Calculate whether the manufacturing overhead was over applied or under applied. Write the appropriate journal entry to record the over/under application. (5 marks)

Boeing Company manufactures batteries and uses jab-onder costing system. For the current year, the manager of the company estimated that the company would need 0.000 machine hours and crafted mufacturing over and cont $125.000 and a variable manufacturing overhead cost of 575 per mashine bo. Boring Company had beginning investory follows: Raw Material WIP Finished Goede $14.000 $12.00 The following information relates to operation in the current year. The raw materials purchased include both direct and indirect matemal Assume that all transactions were on Purchase of Raw Materials 51516000 (70 Direct and on Indirect Raw material requisitioned for the use in production Direct : 51070,000. Indirect : 8230.000 Labour cost Direct : 5335 per he. Indirect : 518 per le Salary for office employees Deprecation on Factory Building $220,000 Depreciation on Corporate Building S180,000 Utility com $100.000 (65* relates to factory and the trees corporate ) Page 1 of 4 SI5.000 Factory Machinery Maintenance Cost Advertising Expense Rent $20,000 $200.000 (s. relates to factory and the heat relates 2 Additional Information: The direct laboces worked a total of 9.300 hours. The indirect labeas worked Sea stal of 11.300 bor - Manufacturing overhead was applied to production. The coropany received lower than exported orders during the year for which the machines ran for a sotal of 70,000 hours . During the year, tolf 46.000 units of batteries were manufactured and transferred to finished goods out of tich 43.000 were sold to customers at the selling price of 70 per banery Required: Use the informatico given aberve to write the appropriate journal entries for locing Company (20 marks) - Calculate whether the manufacturing overhead was over applied or under applied Wine the appropriate journal entry to record the overunder application marks) Boeing Company manufactures batteries and uses jab-onder costing system. For the current year, the manager of the company estimated that the company would need 0.000 machine hours and crafted mufacturing over and cont $125.000 and a variable manufacturing overhead cost of 575 per mashine bo. Boring Company had beginning investory follows: Raw Material WIP Finished Goede $14.000 $12.00 The following information relates to operation in the current year. The raw materials purchased include both direct and indirect matemal Assume that all transactions were on Purchase of Raw Materials 51516000 (70 Direct and on Indirect Raw material requisitioned for the use in production Direct : 51070,000. Indirect : 8230.000 Labour cost Direct : 5335 per he. Indirect : 518 per le Salary for office employees Deprecation on Factory Building $220,000 Depreciation on Corporate Building S180,000 Utility com $100.000 (65* relates to factory and the trees corporate ) Page 1 of 4 SI5.000 Factory Machinery Maintenance Cost Advertising Expense Rent $20,000 $200.000 (s. relates to factory and the heat relates 2 Additional Information: The direct laboces worked a total of 9.300 hours. The indirect labeas worked Sea stal of 11.300 bor - Manufacturing overhead was applied to production. The coropany received lower than exported orders during the year for which the machines ran for a sotal of 70,000 hours . During the year, tolf 46.000 units of batteries were manufactured and transferred to finished goods out of tich 43.000 were sold to customers at the selling price of 70 per banery Required: Use the informatico given aberve to write the appropriate journal entries for locing Company (20 marks) - Calculate whether the manufacturing overhead was over applied or under applied Wine the appropriate journal entry to record the overunder application marks)