Job order costing system

The company produces 2 products: Job 1 and Job 2. Manufacturing overheads are applied based on direct labor hours. The following projections are available for the current year:

Budgeted MOH USD 426,300

Budgeted labour hours 20,300 hours

During April the company has accomplished following jobs

Job 1 - 76 units

Job 2 - 110 units.

The following additional information is also available:

1.1000 sq. m of metal was purchased for USD 5,000

2.400 kg of plastic was purchased for USD 4,000

3.The following information about material usage is available

• 250 sq. m. of metal at USD 5 per sq. m. for Job 1
• 1,000 kg of plastic at USD 10 for Job 2
• 10 units of lubricant at USD 10 per unit
• Metal and plastic used is direct material, lubricant is indirect material.

4.During May the company paid following on labor:

• Direct labour: Job 1 - 800 hours at USD 20 per hour
• Direct labour: Job 2 - 900 hours at USD 20 per hour
• Indirect labour: Job 2 - USD 13,000

5.Depreciation equaled for USD 12,000

6.Rent is USD 1,200, utilities paid is USD 2,100. Invoices for utilities are received but not yet paid.

7.Property tax paid is USD 2,400

8.Insurance cost was USD 3,100, it was prepaid

9.Some administrative labor costs amount to USD 8,000

10.Depreciation of administrative building amount to USD 4,000

11.Other selling expenses are USD 1,000

12.Job 1 was completed on April 20.

13.Half of the jobs 1 was sold for USD 700 each.

As of April 01 the balances of some accounts are as follows: Cash USD 10,000

Accounts receivable USD 21,000

Prepaid insurance USD 5,000

Raw material inventory USD 149,000

Manufacturing supply inventory USD 500

WIP USD 91,000

Finished goods USD 220,000

Accumulated depreciation USD 102,000 Accounts payable USD 13,000

Wages payable USD 8,000

Required:

Calculate predetermined OH rate

Provide journal entries for April

Set - up all T accounts

Calculate over or under allocation. Provide journal entry to close it to COGS

Provide a schedule of COGM

Provide income statement for April.