Syarikat Meriah manufactures handcrafted wooden jewellery boxes. The company uses a job costing system,

and manufacturing overhead is applied by direct labour hours. Estimated total manufacturing overhead for the

current year is RM240,000. The company direct labour are the carpenters. There are 10 carpenters, and each

estimated to work 2,000 hours during the year. The direct labours are paid RM20 per hour. At the beginning of

December, the inventory balances were as follows:

Raw material inventory

Work in process inventory

Finished goods inventory

RM55,000 (5,000 meters of wood @ RM11 per meter)

RM3,700 (Job G60)

RM12,000 (Job B50)

The following transactions occurred during December:

Purchased 3,000 meters of wood at RM11 per meter.

Raw materials transferred to production:

o Job G60: 1,000 meters of wood.

o Job C81: 5,000 meters of wood.

Five litres of glue were purchased and issued to production. The glue is treated as an indirect material. The

glue cost RM20 per litre.

Use of direct labour:

o Job G60: 100 direct labour hours

o Job C81:700 direct labour hours

Other manufacturing costs:

o Depreciation of factory building and equipment costing RM8,000.

o Electricity bill for factory RM400 was paid in cash.

o Received a statement of factory building tax, total RM910, for December.

o Indirect labour salary RM2,500.

Job G60 which started in September was finished in December. Job C81 was incomplete at the end of

December.

Job B50 was sold in December for RM15,000.

Required:

a) Prepare journal entries to record the transactions above.

b) Determine whether the manufacturing overhead overapplied or underapplied in December. Prepare the

journal entry to record the overapplied or underapplied by directly charging to cost of goods sold.

c) Determine the following inventories balances on 31 December:

a. Raw material inventory

b. Work in process inventory 3

c. Finished goods inventory