Novaland Designs Ltd

Novaland Designs Ltd is in the business of designing and manufacturing furniture according to customized orders. As such, Noyaland Designs uses a normal job order costing system to determine their product cost. Designers are paid the hourly rate of $55. The skilled carpenters employed to assemble the furniture are paid $75 per hour. Machines and equipment are utilized to cut, trim and polish the materials used. Therefore, manufacturing overhead {"MOH\") is applied using the number of machine hours. For 202X,the company budgeted MOH to be $1,200,000 and estimated the number of machine hours required for production to be 3,000 hours. Noyaland Designs' policy is to close the over or under-applied MOH to Cost of Goods Sold at the end of each quarter. The ledger balances for the company as at Nov 30, 202): are shown below. The balance in the work in process account comprises only of the amount paid to designers for Job #4. Work in Process Finished Goods (Job #3) Cost of Goods Sold - 420,000 135,000 120,000 Adminstrative 8; Selling Expenses 76,500 Twojobs were processed in Dec, some. The table below show records relating to resources utilized for processing the two jobs in Dec. Direct Material Costs 599,000 525,000 Carpenter Hours \"1 \"\" Other information relating to WDesigns' operations in Dec are detailed below: a] Job #4 is an order from a new restaurant for 200 tables- Due to an unusual erroneous setting in the cutting machine, 2.5 more metres of wood was required per table than was planned. Initial design drawings required onlrllr 3.5 metres mg per table. This was not fa ctored into the agreed upon price of $250,000. The job was fully completed and delivered in Dec. b} Job #5 remains uncompleted at the end of Dec. :1 Job #3 is a batch of customized shelves for a book store. In late Dec, Nova la nd Designs was informed that the book store owner had gone bankrupt. There were various options available on how to deal with Job #3. This issue will be brought up for discussion at a meeting in Jan next year. d} Administrative and selling expenses incurred in Dec is 530,200. The MD H incurred in Dec amounts to $34,3oo. Required: {i} Compute the product cost forJol: #4. {ii} Prepare Novaland Designs' income statement for the quarter ended 31 Dec 2013:. {iii} Postjournal entries relating only to the MDH account during Dec 2o1x