Management accounting Question

In September, Drax & Co began production on two separate jobs: JBE1 (40units) and JBE2 (30units). Direct production information for both jobs are as follows:

JBE1 JBE2

Direct Materials $5,000 $8,000

Direct Labour $2,400 $3,600

Direct Labour Hours (DLH) 600 900

Indirect materials used in production totalled $2,500. For the month, the company had budgeted for 1,000 direct labour hours but 1,500 direct labour hours were used in production. Production overhead cost was budgeted at $10,000 and is applied based on DLH. The production managers salary for the month was $5,000. Depreciation expense for production equipment for the month was $3,500. The company also made production facility related prepayments of $2,250 comprising of $1,300 (rent) and $950 (insurance). At the end of September, the company had completed job JBE1 and sold 20 of the units on credit at a selling price of $700 per unit.

Required:

(a) Prepare journal entries to record the production related events occurring during September (narrations are not required).

(b) Calculate the under/over applied overhead for September. Prepare a journal entry to close this amount to COGS.

(c) Calculate the balance of Finished Goods and Work in Process (WIP) at the end of September. Show all workings.

(d) Is the above question an example of Job Costing or Process Costing? Discuss and explain why this is the case in consideration of the features of the two costing systems.