SWEETS CAKES (PTY) LTD

Sweets Cakes (Pty) Ltd bake wedding cakes for customers. The following information was obtained for the month of December 2020:

Opening balance-Work-in-Progress R10000

Opening balance-Direct materials R6500

Direct materials purchased during Dec 2020 R18800

Costs of direct materials required by the individual cakes during the month were as follows:

Cake for Jacques R4900

Cake for Rosina R4650

Cake for Elizabeth R3950

The direct wages for the month (all paid in cash) were as follows:

Cake for Jacques 80 labour hours @ R20 per hour

Cake for Rosina 120 labour hours @ R22 per hour

Cake for Elizabeth 80 labour hours @ R24 per hour

Additional information:

1. Cake for Jacques and Cake for Rosina were started in December 2020.
2. Cake for Elizabeth was started during November 2020.
3. Cake for Rosina was completed during December 2020 and Rosina was invoiced for R12 000.
4. A pre-determined manufacturing overhead allocation rate is R5 per direct labour hour.
5. Actual manufacturing overheads for December 2020 were R2 000.

Questions:

(a) Calculatethe total over/under-applied overheads (all cakes) for December 2020, state whether it is over-applied or under-applied andpreparea journal entry showing how the over/under-application will be recorded in Sweets Cake's books at the end ofthe 31 December 2020

(b) Preparethe following general ledger accounts of Sweets Cakes (Pty) Ltd for the month of December 2020 (also balance the accounts):

1. Materials control account.
2. Work-in-progress control account.

(c) Calculatethe profit/(loss) that Sweets Cakes made on Cake for Rosina.