Chex Manufacturing Berhad, a made-to-order woodwork manufacturer, uses a job order costsystem and applies overhead to its production on the basis of direct labour costs(DLC). The management budgeted the following estimates for its 2022 operation: 2022 Budgeted Data: Manufacturing Overhead Costs RM 960,000 Direct Labour Costs RM 192,000 for 24,000 direct labour hours (DLH) Machine Hours (MH) 48,000 hours On 1 January of the current year, there were no balance in its inventories. During January, raw materials were purchased on account from Ayataka Sdn. Bhd. for RM30,000. The manufacturer worked on the following jobs throughout its month of operation:

Material Requisition Slip Time Tickets HULK RM8,415 792 DLH THOR RM5,610 528 DLH VISION RM11,475 1,080 DLH General Use RM2,200 625 DLH The charge rate for the labour hours worked is at RM8 per DLH. Actual manufacturing overhead costs incurred for January 2022 includes: RM Depreciation Expense - Machinery 15,000 Factory Rent 35,000 Property Taxes 12,000 Utilities Expense 15,000 Insurance Expense 3,500

At the end of the month, Jobs HULK and VISION are complete. Only Job VISION was sold immediately upon completion at 20% above the cost price.

Continued....

BAC1624 MANAGEMENT ACCOUNTING 1 26 APRIL 2022

NMY/TXF 2/7 Required: a) Prepare the journal entries to record the assignment of costs during January 2022. (5 marks)

b) Indicate the following balances for the month ended 31 January 2022: (i) Raw Materials Inventory (ii) Cost of Goods Manufactured Finished Goods Inventory

(7 marks) c) What is the amount of over- or underapplied overhead at 31 January 2022? Prepare the adjusting entries to close the manufacturing overhead balance as determined. (5 marks)

d) What is the gross profit (adjusted) to be reported for January 2022?