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

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

b. Utility costs incurred are $75,000

c. Raw Materials purchased on cash $450,000

d.

Salaries

$

Indirect Labour

125,000

Direct Labour

250,000

Selling Commission

140,000

Admin Salaries

200,000

e. Marketing cost incurred is $120,000

f. Prepaid insurance expired during this period $170,000.[ 75% belongs

to the factory and the rest to the admin]

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

$25,000

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

i. Use the information below to find the Predetermined Rate using

machine hours as the cost driver

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

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

quarter

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

m. Cash paid to supplier was $9,500

$

Budgeted Overhead

176,000

Budgeted machine hours

51,000 hours

Actual machine hours

60,000 hours

Actual overhead

242,000

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

REQUIRED

1. Prepare Journal entries for the quarter

2. Is production cost underallpied or overapplied?

[Marks 30 ]