Question 1 Renewable Energy Manufacturing Ltd is a leading manufacturer of solar panels. The following data are taken from its accounting records for the financial year ending 31 December 2022: $ Sales 4,425,000 Purchases of raw material 1,500,000 Direct labour cost incurred 1,050,000 Other selling and administrative expenses 180,000 Indirect labour cost (60% for factory; 40% for selling & admin) 600,000 Other manufacturing expenses 225,000 Depreciation of building (75% for factory; 25% for selling & admin) 300,000 Depreciation of equipment (85% for factory; 15% for selling & admin) 240,000 Income tax expense 60,000 Indirect material used (all for factory) 45,000 Insurance on factory & equipment (90% for factory; 10% for selling & admin) 75,000 Electricity (80% for factory; 20% for selling & admin) 150,000 Raw material inventory, 1 January 2022 120,000 Raw material inventory, 31 December 2022 90,000 Work in process, 1 January 2022 30,000 Work in process, 31 December 2022 45,000 Finished goods inventory, 1 January 2022 75,000 Finished goods inventory, 31 December 2022 105,000 The company uses normal costing and manufacturing overhead is applied at the rate of 125% of direct labour cost.Required: (a) Compute the manufacturing costs incurred for the current year. (4 marks) (b) Compute the cost of goods manufactured (COGM) for the current year. (2 marks) (c) Compute the manufacturing overhead variance. (7 marks) (d) Compute the cost of goods sold (COGS) if the company closes overapplied or underapplied overhead cost into the cost of goods sold. (3 marks) (e) Prepare Renewable Energy Manufacturing Ltd's Income statement for the year. (9 marks) SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 3 of5 ACCZUB Tutor-Marked Assignment (f) Present the j oumal entry to close the manufacturing overhead control account if Renewable Energy Manufacturing Ltd disposed the manufacturing overhead variance as described in (d). (2 marks) (g) Prepare the journal entry to close off the balance in the manufacturing overhead account if instead of (d), Renewable Energy Manufacturing Ltd closed off the manufacturing overhead variance by pro-rating the amount to the work in process, nished goods inventory and cost of goods sold using method 2 (Seminar 2 slide#33). (8 marks) (h) Explain the effect on prot between the two methods of closing off the manufacturing overhead described in (d) and (g)