Finishing and Furnishing manufactures customized household furnishings. The company uses a perpetual

inventory system and has a highly labour intensive production process, so it assigns manufacturing

overhead based on direct labour cost. Finishing and Furnishing expects to incur $2,205,000 of manufacturing overhead

costs and estimated direct labour costs of $3,150,000 during 2016.

At the end of December 2018, Finishing and Furnishing reported work in process inventory (Job 551) of $93,000

The following events occurred during January 2019.

i) Purchased materials on account, $392,000

ii) Incurred manufacturing wages of $400,000

iii) Requisitioned direct materials and used direct labour in manufacturing

Direct MaterialDirect Labour

$$

Job 5517020061200

Job 55297500115600

Job 55310530078200

Job 55411700085000

iv) Issued indirect materials to production, $30,000

v) Charged indirect manufacturing wages to production, $60,000

vi) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $134,000

vii) Allocated overheads to jobs at the predetermined rate

viii) Units completed: 551, 552 & 554

ix) Sold units 551 & 554 (billed customers at a margin of 33% on sales)

Required:

(a) Compute Finishing and Furnishing predetermined manufacturing overhead rate for 2019.

(b) Calculate the total manufacturing costs for each job.

(c) Using the total figures, record the above transactions in the general journal.

(d) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly

showing the balance before closing the account. State the journal entries necessary to dispose of

the variance. Assume that the manufacturing overhead variance is immaterial.

(e)calculate the balance in the Cost of Goods Sold account after the adjustment?

(f) Compute Finishing and Furnishing gross profit earned on the jobs, after adjusting for the manufacturing overhead

variance

(g) show the appropriate entries to Work in Process Inventory account & determine the account balance on January 31