Question

(1) Prepare the journal entries for the above events. (1 mark per journal entry).

a)

b)

c)

d)

(1) Continued – prepare the journal entries for the above events. (1 mark per journal entry).

e)

f)

g)

(2) Determine whether overhead was under- or over-applied and show the Taccount for Overhead (1 mark).

(3) Calculate the ending balances of the following accounts: Raw Materials, Work in progress and Finished goods (1 mark each). The following beginning balances are provided: Raw materials $5,170, Work in progress $11,200, and Finished goods $2,630.

(4) Assume that the overhead variance was materials and write the journal entry for the reconciliation of overhead costs from part (2) and COGS balance is $30,000 (1 mark).

(5) Given we know the actual overhead costs at the end of May, why did we have to reconcile the actual with the expected overhead costs at the end of June? (1 mark)

edition of Ql: Adapted past exam question 2013, sem 1 and (M3.35 Trotman et al.) QClub Limited manufactures tags for luggage with GPS tracking. During the month of May, the following occurred: (a) Raw materials were purchased on account for $23,175 (b) Raw materials totalling S19,000 were requisitioned for use in production (c) Direct labour payroll for the month was $17,850 with an average wage of S8.50 per hour hour rent of S9,500, factory electricity costs of S2,000 and depreciation on factory (d) Factory overhead is charged to production at the rate of S7 per direct labour (e) Actual overhead of $15,500 was incurred and paid, where this included factory equipment $4,000 (f) Completed units costing S36,085 were transferred to finished goods (g) Tags costing S30,000 were sold on account for S36,000