Question

QUESTION 2 (25 MARKS) A. D'Salai Company had only one job in process on 19 May. The job had been charged with RM1,400 of direct materials, RM6,192 of direct labor, and RM5,712 of manufacturing overhead cost. The company assigns overhead costs to jobs using the predetermined overhead of RM11.90 per direct labor hour. During May, the following activities were recorded: RM Raw materials (all direct materials): Beginning balance 8,500 Purchased during the month 48,000 Used in production 51,800 Labor: Direct labor hours worked during the month 1,900 24,510 Direct labor cost incurred 21,000 Actual manufacturing overhead costs incurred Inventories: 4,700 Raw materials as at 30 May 19,536 Work in process as at 30 May Required: a) Prepare the schedule of costs of goods manufactured of D'Salai Company for May. (9 marks) b) Compute the over/under applied manufacturing overhead and state the entry to dispose the applied overhandis h ment (7 marks)

Answer 1

a)

D' SALAI COMPANY
Schedule of Cost of Goods Manufactured
For the Month of May
Beginning raw materials	8500
Add: Raw material purchases	48000
Raw materials available for use	56500
Less: Ending raw materials	4700
Direct materials used		51800
Direct labor		24510
Manufacturing overhead applied*		22610
Total current manufacturing costs		98920
Add: Beginning work in process**		13304
Total cost of work in process		112224
Less: Ending work in process		19536
Cost of goods manufactured		92688

*Manufacturing overhead applied = 1900 x RM11.90 = RM22610

**Beginning work in process = RM1400 + RM6192 + RM5712 = RM13304

b) Actual manufacturing overhead costs incurred RM21000 - Manufacturing overhead costs applied RM22610 = Over-applied manufacturing overhead RM1610

Account Titles and Explanation	Debit	Credit
Manufacturing overhead	1610
Cost of goods sold		1610
(To dispose over-applied overheads)

Per HOMEWORKLIB RULES the first question has been answered. Please post the remaining independent question separately. Thank you.