QUESTION 2 Cranberries Sdn. Bhd. had the following transactions during its first month of operations: 1. Purchased raw materials on account, RM80,000. 2. Raw materials of RM30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that RM6,000 was classified as indirect materials. 3. Factory labour costs incurred were RM150,000 of which RM120,000 pertained to factory wages payable and RM30,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that RM100,000 was direct labour and RM50,000 was indirect labour. 5. Overhead costs incurred on account were RM125,000. 6. Manufacturing overhead was applied on the basis of direct labour cost. Manufacturing overhead for the year is estimated to be RM1,800,000 while total direct labour is estimated at RM1,500,000. 7. Goods costing RM130,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods. 8. Finished goods costing RM100,000 to manufacture were sold on account for RM130,000. Required: (a) Compute the predetermined overhead rate. (2 marks) (b) Prepare journal entries for the above transactions. (11 marks) (c) Illustrate with T-account for work in process and finished goods inventories. (7 marks)