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QUESTION 3
The G0-Magic company uses job-order costing system. The following data relate to the first quarter of the company's fiscal year
a. Materials requisitioned for production cost $250,000 [ direct materials and indirect materials are proportioned by 6:2].
b. Repairs costs incurred are $75,000
c. Raw Materials purchased on cash $150,000
d.
Salaries $
Direct Labour 125,000
Supervisors salaries [factory 50,000
Marketing cost 45,000
Admin Salaries 80,000
e. Selling commission cost incurred is $60,000
f. Insurance for factory $70,000. Admin insurance is 40% of the factory insurance
g. Rent expense for the factory is $50,000 and the rent for the shop is $45,000
h. Supplies expense for the factory incurred during the month is $15,000 [on account]
i. Use the information below to find the Predetermined Rate using machine hours as the cost driver
$
Estimated Overhead 76,000
Budgeted machine hours 21,000 hours
Actual machine hours 30,000 hours
Actual overhead 142,000
j. Journalize the applied cost used in section (i)
k. Sold goods costing $400,000 for $650,000
l. Depreciation for equipment of factory for the period was $16700
m. Depreciation for the building [store] was $8,500
n. $45,000 Cash was paid for the suppliers
REQUIRED
1. Prepare Journal entries for the quarter
2. Is production cost underallpied or overapplied?
Answer & Explanation
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