Question

this is all the info given and the topic is "Product Costing"

Assignment #3 _Product Costing PART 1 (25 marks) G-Force Woodcraft manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labour intensive production process, so it assigns manufacturing overhead based on direct labour cost. G-Force expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2016. At the end of December 2018, G-Force reported work in process inventory (Job 551) of $93,000 The following events occurred during January 2019. i) Purchased materials on account, $392,000 ii) Incurred manufacturing wages of $400,000 ill) Requisitioned direct materials and used direct labour in manufacturing Direct Materials Direct Labour Job 551 $70,200 $61,200 Job 552 97,500 115,600 Job 553 105,300 78,200 Job 554 117,000 85,000 iv) Issued indirect materials to production, $30,000 v) Charged indirect manufacturing wages to production, $60,000 vi) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $134,000 vii) Allocated overheads to jobs at the predetermined rate viii) Units completed: 551, 552 & 554 ix) Sold units 551 & 554 (billed customers at a margin of 33/3% on sales) (b) Calci Required: (a) Compute G-Force's predetermined manufacturing overhead rate for 2019. (1% marks) Calculate the total manufacturing costs for each job. (4 marks) (c) Using the total figures, record the above transactions in the general journal. (10 marks) (d) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial. (4 marks) What is the balance in the Cost of Goods Sold account after the adjustment? (2 marks) (f) Compute G-Forcer's gross profit earned on the jobs, after adjusting for the manufacturing overhead variance (1% marks) (g) Post the appropriate entries to Work in Process Inventory account & determine the account balance on January 31. (2 marks)

Answer 1

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Part a
Estimated manufacturing overheads	a	$                          2,205,000
Estimated direct labor cost	b	$                          3,150,000
Predetermined overhead rate	a/b	70.00%	of DL
Part b
		Job 551	Job 552	Job 553	Job 554	Total
Beginning WIP		$                                93,000				$         93,000
Direct Material		$                                70,200	$      97,500	$   105,300	$   117,000	$       390,000
Direct Labor		$                                61,200	$   115,600	$      78,200	$      85,000	$       340,000
Overhead applied 70% of DL		$                                42,840	$      80,920	$      54,740	$      59,500	$       238,000
Total Manufacturing cost		$                              267,240	$   294,020	$   238,240	$   261,500	$   1,061,000
Part d
Manufacturing overheads
Debit		Credit
Indirect Material	$      30,000	Applied overheads:
Indirect manufacturing wages	$      60,000	Job 551	$      42,840
Other Overheads	$   134,000	Job 552	$      80,920
		Job 553	$      54,740
		Job 554	$      59,500
		Ending Balance	$      14,000
Manufacturing overheads	$      14,000
Cost of Goods Sold		$                                14,000
(To dispose off overapplied overheads)
Part e
		Job 551	Job 554	Total
Total Manufacturing cost		$                              267,240	$   261,500	$   528,740
Less: Overapplied overheads				$   (14,000)
Balance in COGS				$   514,740