Elite Home Decor 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. Elite expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2020. At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000 The following events occurred during January - March 2020. i) Purchased materials on account, $392,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing Direct Materials Direct Labour Job 551 Job 552 Job 553 Job 554 $70,200 97,500 105,300 117,000 $61,200 115,600 78,200 85,000 iv) Issued indirect materials to production, $30,000 v) Charged indirect manufacturing wages to production, $60,000 vi) Depreciation of production machinery, $85,000 vii) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $49,000 viii)Allocated overheads to jobs at the predetermined rate ix) Units completed: 551, 552 & 554 x) Sold units 551 & 554 (billed customers at a margin of 33⅓% on sales) compute Elite's predetermined manufacturing overhead rate for 2020 calculate the total manufacturing cost for each job using the total figures , record the above transactions in the general journal
Elite Home Decor 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. Elite expects to incur $2,205,000 of manufacturing overhead costs
and estimated direct labour costs of $3,150,000 during 2020.
At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000
The following events occurred during January - March 2020.
i) Purchased materials on account, $392,000
ii) Incurred manufacturing wages of $400,000
iii) Requisitioned direct materials and used direct labour in manufacturing
Direct Materials Direct Labour
Job 551
Job 552
Job 553
Job 554
$70,200
97,500
105,300
117,000
$61,200
115,600
78,200
85,000
iv) Issued indirect materials to production, $30,000
v) Charged indirect manufacturing wages to production, $60,000
vi)
vii) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $49,000
viii)Allocated
ix) Units completed: 551, 552 & 554
x) Sold units 551 & 554 (billed customers at a margin of 33⅓% on sales)
compute Elite's predetermined manufacturing overhead rate for 2020
calculate the total
using the total figures , record the above transactions in the general journal
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