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QUESTION 1 The Go-Magic company uses job-order costing system. The following data relate to the first quarter of the company's fiscal year a. Materials purchased on credit $190,000 b. Materials issued from store room to production $175,000 (75% direct materials and 20% indirect materials) c. Utility costs incurred in the factory 519,000 d. Cost of employee salaries a. Direct Labour $45,000 b. Indirect cost and support workers in the factory $23,000 C. Marketing salaries $65,000 e. Advertising cost incurred = $84,000 f. Prepaid insurance expired during the quarter $75,000. the ratio of insurance production to admin insurance = 2.11 g. Rental cost = $36,000 [ selling cost consists of 25% of the total rental cost h. Company applies manufacturing overhead based on machine hours Budgeted overhead cost $200.000 and Estimated machine hours = 42000 hours. Actual machine hours worked = 45,000 hours Calculate the PR and journalize the applied cost 1. Goods costing to produce =$1,400,000 were completed during the quarter Sales on credit - $3,000,000 REQUIRED 1. Prepare Journal entries for the quarter 2. Is overhead cost under-applied or over-applied? What adjustment should be made to correct the cost of goods account QUESTION 1 The Go-Magic company uses job-order costing system. The following data relate to the first quarter of the company's fiscal year a. Materials purchased on credit $190,000 b. Materials issued from store room to production $175,000 (75% direct materials and 20% indirect materials) c. Utility costs incurred in the factory 519,000 d. Cost of employee salaries a. Direct Labour $45,000 b. Indirect cost and support workers in the factory $23,000 C. Marketing salaries $65,000 e. Advertising cost incurred = $84,000 f. Prepaid insurance expired during the quarter $75,000. the ratio of insurance production to admin insurance = 2.11 g. Rental cost = $36,000 [ selling cost consists of 25% of the total rental cost h. Company applies manufacturing overhead based on machine hours Budgeted overhead cost $200.000 and Estimated machine hours = 42000 hours. Actual machine hours worked = 45,000 hours Calculate the PR and journalize the applied cost 1. Goods costing to produce =$1,400,000 were completed during the quarter Sales on credit - $3,000,000 REQUIRED 1. Prepare Journal entries for the quarter 2. Is overhead cost under-applied or over-applied? What adjustment should be made to correct the cost of goods account

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