Question 2 Westel Ltd uses a job costing system. At the beginning of the month of June, two orders were process as follows: Order 88 Order 105 Direct Materials $1,000 $900 Direct Labour $1,200 $200 Overhead allocation $1,800 $300

There was no inventory in finished goods on June 01. During the month of June orders numbered 106 through 120, inclusive were put into process. Direct materials requirements amounted to $13,000, direct labour costs for the month were $20,000 and actual manufacturing overhead recorded during the month amounted to $28,000. The only order in process at the end of June was Order 120, and the costs incurred for this order were $1,150 of direct materials and $1,000 of direct labour. In addition, Order 118 which was 100% complete, was still on hand on June 30. Total costs for this order was $3,300.

The firms overhead allocation rate in June was the same used as that used in May and is based on labour cost.

Prepare journal entries, with supporting calculations, to record the cost of goods manufactured, the cost of goods sold and the closing of the overapplied or underapplied overhead to the cost of goods sold. (You will need to provide a Cost of Goods Manufactured statement and Cost of Goods Sold Statement)