QUESTION 3

The G0-Magic company uses job-order costing system. The following data relate to the first quarter of the companys fiscal year

1. Materials requisitioned for production cost $550,000 [ direct materials and indirect materials are proportioned by 6:2].

2. Utility costs incurred are $75,000

3. Raw Materials purchased on cash $450,000

Salaries	$
Indirect Labour	125,000
Direct Labour	250,000
Selling Commission	140,000
Admin Salaries	200,000

5. Marketing cost incurred is $120,000

6. Prepaid insurance expired during this period $170,000.[ 75% belongs to the factory and the rest to the admin]

7. Rental expense for the factory is $80,000 and rent for the shop is $25,000

8. Supplies cost incurred during the month is $12,000 [on account]

9. Use the information below to find the Predetermined Rate using machine hours as the cost driver

	$
Budgeted Overhead	176,000
Budgeted machine hours	51,000 hours
Actual machine hours	60,000 hours
Actual overhead	242,000

10. Journalize the applied cost used in section (i)

11. Goods costing to produce =$3,400,000 were completed during the quarter

12. Cash Sales was $1,200,000. Cost to produce it was $800,000

13. Cash paid to supplier was $9,500

14. $25,000 Cash was paid for Bank Loans

REQUIRED

1. Prepare Journal entries for the quarter

2. Is production cost underallpied or overapplied?