QUESTION $2$

Instructions: Journalize the following transactions and events that took place at Affluent Productions Corp.

Determine the amount of manufacturing overhead cost applied to production for the year.

A$.$ Purchased $$320,000$ of raw materials

B$.$ Production requisitioned $$88,000$ of raw materials of which $$5,000$ was indirect materials.

C$.$ Paid salaries: $$150,000$ to workers manning the machines and $$70,000$ to supervisors.

D$.$ Applied overhead to production costs, using an activity$-$based costing system:

At the beginning of the year the company made the following estimates of cost and activity for its five activity cost pools:

$\backslash$table$[[$Activity Cost Pool,Activity Measure,Estimated Overhead Cost,Expected Activity$],[$Production orders,Number of orders,$$76,000,3,000$ orders$],[$Board etching,Number of boards,$300,000,2,000$ boards$],[$Parts management,Number of part types,$160,000,380$ part types$],[$Labor related,Direct labor$-$hours,$220,000,20,000$ direct labor$-$hours$],[$General factory,Machine$-$hours,$280,000,75,000$ machine$-$hours$]]$

During the year, actual activity was recorded as shown on the right :

E$.$ Incurred an additional $$916,067$ of actual overhead costs.

F$.$ Completed $90\%$ of the job.

G$.$ Sold $85\%$ of the finished product at a $20\%$ profit.

H$.$ Closed out the Factory Overhead accounts, assuming the misapplied balance was considered $($a$)$ immaterial, $($b$)$ material.

Activity Cost Pool

Production orders

Board etching

Parts management

Labor related

General factory

Actual Activity

$3,100$ orders

$1,800$ boards

$380$ part types

$21,000$

$76,000$

direct labor$-$hours

machine$-$hours