HMG uses direct labour hours to apply manufacturing overhead. The average hourly rate paid to mandating the 1 beginning 2020, manufacturing overhead was estimated to be $100,000 and direct door hours were estimated to be 10:00 A Imanufacturing overhead for the year was $100.000. Actual direct labour hours used were 11.00 3 Chapter formulas 11. Predetermined overhead rate Estimated total manufacturing overhead costs/Estimated total units in the allocation base 12. Overhead applied to a particular job Predetermined overhead rate x Amount of allocation base incurred by job Required: Part 1: Calculate the predetermined overhead rate for 2020. (3 marks) Predetermined overhead rate Part 2: Job Z is one of the jobs that was worked on during 2020. The details from the job cost sheet are shown below: JOB COST SHEET Job Z Direct materials Direct labour Manufacturing overhead $2,900 $3,600 $? a. Compute the amount of overhead applied to Job Z (3 marks) Une jobs that was worked on during 2020. The details from the same 1 17 18 JOB COST SHEET Job Z Direct materials Direct Labour Manufacturing overhead $2,0 $3,600 $2 a. Compute the amount of overhead applied to lob Z. (3 marks) 20 21 22 23 24 25 26 27 Manufacturing overhead applied 28 b. Compute the total cost of Job Z. (1 mark) 29 30 31 32 33 34 Total cost of lob Z 35 36 37 c. Assume that Job Z was completed but not yet sold by the end of May. Prepare the necessary journal entry. (1 mark) Debit Credit Assume that lob Zwas completed but not yet sold by the end of May. Prepare the nece de Debit Credit 3336 29 40 42 Part 3: Prepare the journal entry to record the manufacturing overhead applied for the year. (5 males) 44 45 46 47 Manufacturing overhead applied 48 49 Debit Credit 50 51 52 53 54 Part 4: Assume that the applied manufacturing overhead for the year, distributed to the following accounts in the amounts indicated. 55 Overhead 56 Applied $15,000 Work in process inventory, end of the year $25.000 Part 4: Assume that the applied manufacturing overhead for the year, distributed to the following accounts in the amounts indicated Work in process inventory, end of the year Finished goods inventory, end of the year Cost of goods sold Overhead Applied $15,000 $25,000 2 a. Prepare the journal entry to dose over or under applied overhead assuming the company does not allocate creer or under applied overhead. (4 marks) Debit Credit b. Assume the company follows IAS 2. Would the journal entry in part a change? (1 mark) 1 Debi Credit . b. Assume the company follows IAS 2. Would the journal entry in part a charpe? (1 mark] c. Why or why not? Explain (2 marks)
