Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33⅓% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) ii) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # Direct Materials Direct Labour 101 70,220 61,200 102 97,500 115,600 103 105,300 78,200 104 117,000 85,000 iv) Issued indirect materials to production, $30,000. v) Charged indirect manufacturing wages to production, $60,000. vi) Cost of detailed graphic design for Job #FBT 104, paid by cash $17,240 vii) Depreciation of production machinery used on all four (4) jobs, $85,000 viii)Other manufacturing overhead costs incurred on jobs FBT 101 to 104 amounted to $49,000. ix) Allocated overheads to each job at the predetermined rate x) Jobs completed: FBT 101, 102 & 104. xi) Delivered jobs FBT 101 & 104 to the customers. FBT 101 was fully paid for; the customer for FBT 104 paid 60% of the selling price and promised to pay the remainder in February. 1. Calculate the total manufacturing costs for each job. 2. Using the total figures, record the above transactions in the general journal. Determine the balance before closing on the Manufacturing Overhead T-account. 3. State the journal entries necessary to dispose of the variance.
Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual
inventory system and has a highly labour-intensive production process, so it assigns manufacturing
overhead based on direct labour cost. The business operates at a profit margin of 33⅓% on sales.
Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct
labour costs of $3,150,000 during 2025.
At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 -
Job FBT 101 - $51,000 & Job FBT 102 - $42,980
The following events occurred during January 2025.
i) ii) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000
Incurred manufacturing wages of $400,000
iii) Requisitioned direct materials and used direct labour in manufacturing.
| Job # | Direct Materials | Direct Labour |
| 101 | 70,220 | 61,200 |
| 102 | 97,500 | 115,600 |
| 103 | 105,300 | 78,200 |
| 104 | 117,000 | 85,000 |
iv) Issued indirect materials to production, $30,000.
v) Charged indirect manufacturing wages to production, $60,000.
vi) Cost of detailed graphic design for Job #FBT 104, paid by cash $17,240
vii)
viii)Other manufacturing overhead costs incurred on jobs FBT 101 to 104 amounted to $49,000.
ix) Allocated overheads to each job at the predetermined rate
x) Jobs completed: FBT 101, 102 & 104.
xi) Delivered jobs FBT 101 & 104 to the customers. FBT 101 was fully paid for; the customer for FBT
104 paid 60% of the selling price and promised to pay the remainder in February.
1. Calculate the total
2. Using the total figures, record the above transactions in the general journal. Determine the balance before closing on the Manufacturing Overhead T-account.
3. State the
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