Cl. Machinex Parts Ltd. produces ignitions switches for Toyatam cars. The company allocates manufacturing overhead on a plant-wide basis based on the machine hours each job uses. The budget data for the year ended December 31, 2019 is as follows: Budget Direct labour hours 7,300 hours Machine hours 8,100 hours Depreciation for Head Office building $15,200 Factory supervisor salary $57,000 Depreciation on factory and equipment $61,500 Property taxes for factory $40,500 Advertising costs $18,000 Factory electricity and water costs $19,200 Direct materials cost $72,500 Actual direct labour hours for the year was 6,700 hours and actual machine hours incurred for the year was 9,100 hours. Actual manufacturing costs incurred for the year was $190,143. Required: (7 Marks - Show all calculations) a. Compute the predetermined manufacturing overhead rate - round to the nearest cent (2 marks), b. Calculate the amount of manufacturing overhead applied to jobs for the past year, (1 mark). c. Calculate the amount of under-applied or over-applied manufacturing overhead (Indicate whether the amount is under or over-applied). (2 marks) d. Prepare the journal entry to dispose of the under or over applied manufacturing overhead (2 marks) Account Nome Debit Credit Chemex Ltd. Income Statement For the year ended December 31, 2019 Sales $425,000 142,800 Less: Cost of Goods Sold 211,600 Gross Profit 213,400 Less Operating Expenses Operating Income before Income Taxes 66,600 The effective tax rate is 30%. Required: a. Calculate Chemex Ltd's Return on Investment (ROI) using the expanded form. (1 mark) b. In proper sentence form identify 2 specific ways how the company could improve their ROI. (2 marks) c. In proper sentence form describe 2 of the 3 advantages of the ROI. (2 marks). TH Paragraph BE N US X x = Font family Font size H2 Required: a. Calculate Chemex Ltd's Return on Investment (ROI) using the expanded form. (1 mark) Cl. Machinex Parts Ltd. produces ignitions switches for Toyatam cars. The company allocates manufacturing overhead on a plant-wide basis based on the machine hours each job uses. The budget data for the year ended December 31, 2019 is as follows: Budget Direct labour hours 7,300 hours Machine hours 8,100 hours Depreciation for Head Office building $15,200 Factory supervisor salary $57,000 Depreciation on factory and equipment $61,500 Property taxes for factory $40,500 Advertising costs $18,000 Factory electricity and water costs $19,200 Direct materials cost $72,500 Actual direct labour hours for the year was 6,700 hours and actual machine hours incurred for the year was 9,100 hours. Actual manufacturing costs incurred for the year was $190,143. Required: (7 Marks - Show all calculations) a. Compute the predetermined manufacturing overhead rate - round to the nearest cent (2 marks), b. Calculate the amount of manufacturing overhead applied to jobs for the past year, (1 mark). c. Calculate the amount of under-applied or over-applied manufacturing overhead (Indicate whether the amount is under or over-applied). (2 marks) d. Prepare the journal entry to dispose of the under or over applied manufacturing overhead (2 marks) Account Nome Debit Credit Chemex Ltd. Income Statement For the year ended December 31, 2019 Sales $425,000 142,800 Less: Cost of Goods Sold 211,600 Gross Profit 213,400 Less Operating Expenses Operating Income before Income Taxes 66,600 The effective tax rate is 30%. Required: a. Calculate Chemex Ltd's Return on Investment (ROI) using the expanded form. (1 mark) b. In proper sentence form identify 2 specific ways how the company could improve their ROI. (2 marks) c. In proper sentence form describe 2 of the 3 advantages of the ROI. (2 marks). TH Paragraph BE N US X x = Font family Font size H2 Required: a. Calculate Chemex Ltd's Return on Investment (ROI) using the expanded form. (1 mark)
