Please assist with question (g) as highlighted in red. Elite Home Decor manufactures customized household furnishings. The company uses a perpetualinventory system and has a highly labour intensive production process, so it assigns manufacturingoverhead based on direct labour cost. Elite expects to incur $2,205,000 of manufacturing overhead costsand 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 $93,000The following events occurred during January - March 2020.i) Purchased materials on account, $392,000ii) Incurred manufacturing wages of $400,000ii) Requisitioned direct materials and used direct labour in manufacturingDirect Labour$61,200Direct Materials$70,200Job 551Job 55297,500115,600Job 553105,30078,200Job 554117,00085,000iv) Issued indirect materials to production, $30,000v) Charged indirect manufacturing wages to production, $60,000vi) Depreciation of production machinery, $85,000vii) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $49,000vii) Allocated overheads to jobs at the predetermined rateix) Units completed: 551, 552 & 554x) Sold units 551 & 554 (billed customers at a margin of 33%% on sales)Required:(a)Compute Elite's predetermined manufacturing overhead rate for 2020.(b)Calculate the total manufacturing costs for each job.(c)(d)Using the total figures, record the above transactions in the general journal.Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearlyshowing the balance before closing the account. State the journal entries necessary to dispose ofthe variance. Assume that the manufacturing overhead variance is immaterial.(e)What is the balance in the Cost of Goods Sold account after the adjustment?(f)Compute Elite's gross profit earned on the jobs sold, after adjusting for the manufacturing overheadvariance(8)Post the appropriate entries to Work in Process Inventory account & determine the account balanceon March 31, the end of the quarter.

SOLUTION- WORK IN PROGRESS BEGINNING 93000 ix 822760 iii 390000 iii 340000 ix…

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 Labour $61,200 Direct Materials $70,200 Job 551

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 Labour $61,200 Direct Materials $70,200 Job 551

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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