Question
Glam Kitchen is a kitchen cabinet making company based on customer orders. The company practices normal packaging and any manufacturing overhead adjustments are charged to
Glam Kitchen is a kitchen cabinet making company based on customer orders. The company practices normal packaging and any manufacturing overhead adjustments are charged to the Cost of Goods Sold at the end of the month. On June 1, the Company's ledger account contained the following information:
Raw Material Inventory RM30,000
Work In Process Inventory RM 12,600
Subsidiary Inventory Working Inventory account information on June 1 is as follows:
Cost of Worksheet
No. Work Direct Material Direct LaborManufacture OH
(Customer's Name)
K1 - Aiman RM2,500 RM2,000 RM1,600
K2 - Julia RM 2,000 RM 1,200 RM 960
K3 - Stephen Chow RM 900 RM 800 RM 640
Total RM5,400 RM4,000 RM3,200
Costs involved throughout June:
Purchase of raw material on account of RM5,000.
Payment of wages and salaries of workers RM8,000.
Manufacturing overhead payments of RM1,200.
Sales and administrative expenses of RM400.
A summary of materials procurement forms and employee time tickets for June shows the following information:
No. Work Material Acquisition Form Employee Ticket Form
(Customer's Name)
K1 - Aiman RM 500 RM 400
K2 - Julia RM 600 RM 1,000
K3 - Stephen Chow RM 2,300 RM 1,300
K4 - Prem Kumar RM 2,400 RM 3,300
RM5,800 RM 6,000
General Use RM 1,500 RM 2,000
Total RM7,300 RM8,000
The manufacturing overhead is absorbed into the work at a rate of 0.80 for a direct labor cost. Kitchen cabinets for Aiman, Julia and Stephen Chow customers have been set up in June. The cost of the kitchen cabinet is RM12,500 each and is paid in cash.
You are required:
a) Prepare journal entries for June transactions:
(i) Purchase of raw materials.
(ii) Delivery of direct materials to production and direct labor engagement.
(iii) Involvement of actual overhead costs.
(iv) Absorption of manufacturing overhead costs to output.
(v) Sales and administration expenses involvement.
(vi) Setup and sale of K1, K2 and K3.
(vii) Overdose or over-absorption adjustment.
b) Discuss two (2) advantages of normal packing versus actual packing.
c) Describe two organizational features that are appropriate to use in the process posting system.
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