Question 2.1 (Total: 36 marks) The following costs are attributed to the Gandalf and Company: Purchase of raw materials (all direct) $291,100 Direct labour cost 141,800 Manufacturing overhead costs 198,100 Change in inventories: Decrease in raw materials $9,100 Decrease in work in process 4,100 Decrease in finished goods 13,200 Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost. Submission Instructions: 1. Calculate the cost of goods manufactured. 2. What was the cost of goods sold before adjusting for any under or over applied overhead? 3. By how much was manufacturing overhead cost under or over applied? 4. Prepare a summary journal entry to close any under or over applied manufacturing overhead cost to the cost of goods sold. Is such an entry appropriate in this situation? Why or why not? Question 2.2 (Total: 30 marks) Paddle Place manufactures paddles and tables. In December, the two production departments had budgeted allocation bases of 3,100 machine-hours in Paddle and 6,900 direct manufacturing labor-hours in Table. The budgeted manufacturing overheads for the month were $51,200 and $56,900, respectively. For Project X, the actual costs incurred in the two departments were as follows: Paddle Table Direct materials purchased on account $80,000 $177,500 Direct materials used 21,200 12,200 Direct manufacturing labor 41,900 53,500 Indirect manufacturing labor 8,900 9,000 Indirect materials used 5,100 4,750 Lease on equipment 14,100 3,750 Utilities 990 1,250 Project X incurred 900 machine-hours in Paddle and 200 manufacturing labor-hours in Table. The company uses a budgeted overhead rate for applying overhead to production. Submission Instructions: 1. Determine the budgeted manufacturing overhead rate for each department. 2. Prepare the journal entries for Paddle department. 3. What is the total cost of Project X? Question 2.3 (Total: 24 marks) Identify the following situations as job-order costing or process costing? Situation Job Order or Process Costing An oil refinery A soft-drink bottler A film studio A manufacturer of fine custom jewelry A textbook publisher A paint factory A golf course designer A public accounting firm A pharmaceutical company An advertising agency A flour mill A landscaping company A catering service A commercial aircraft manufacturer A management consulting firm An auto repair garage An apparel manufacturer Question 2.4 (Total: 10 marks) Hamilton Company recorded the following transactions for the just-completed month. Journalize these entries. a. $45,000 in raw materials was purchased on account. b. $125,000 in raw materials was requisitioned for use in production. Of this amount, $70,000 was for direct materials and the remainder was for indirect materials. c. Total labour wages of $212,000 were incurred. Of this amount, $183,000 was for direct labour and the remainder were for indirect labor. d. Additional manufacturing overhead costs of $189,000 were incurred. e. There was $400,000 of manufactured products completed by the end of the month.