Owiwi Nigeria Limited has the following data which relates to an accounting period in a jobbing Engineering work that uses a normal job costing system. The jobs are process by two department. The budgeted and actual data for the previous year is given below.

Department A Department B

Budgeted overhead N10000 N50000

Actual overhead N11000 N52000

Expected Activity (Direct Labor Hour) 5000 1000

Expected Machine Hour 1000 5000

The data for several jobs done during the year is given below

Job 5

Direct Material N2000

Direct Labor cost:

Department A(500 hours @ N6 per hour) N3000

Department B (100 hours @ N6 per hour) N600

Machine Hour

Department A 10

Department B 120

Unit produced 1000

Owiwi Nigeria Limited uses a plantwide, predetermined overhead rate to assign overhead to jobs. Direct Labor Hour is used to compute predetermined overhead rate. Owiwi Nigeria Limited price the job at cost plus 20%

Required:

a. Calculate the predetermined overhead rate.

b. Calculate per unit manufacturing cost using predetermined overhead rate.

c. Prepare the journal entries for the completion and sale of job 5.

d. Calculate unit manufacturing cost for job 5 using the department overhead rate. Use Direct Labor Hour for Department A and Machine hour for Department B. Comment on your answer.

e. Using your answer in d above, prepare the journal entries for the completion and sale of job 5.