a) Compute Exclusive Souvenirs predetermined manufacturing overhead rate for 2020. b) State the journal entries necessary to record the following transactions in the general journal.(i) Total materials issued to production(ii) Manufacturing labour incurred(iii) Assign manufacturing labour to the appropriate accounts(iv) Other manufacturing overhead incurred(v) Manufacturing overhead applied to production(vi) Move completed jobs to finished goods(vii) Account for jobs completed and sold c) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. What is the balance on the account before performing end of period closing entries? Is manufacturing overhead under- or over- absorbed? State the journal entries necessary to dispose of the variance.Assume that the manufacturing overhead variance is immaterial. Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch ofzouvenirs is a job. The company uses a perpetual inventory system and has a highly labour-intensiveproduction process, so it assigns manufacturing overhead based on direct labour cost. Exclusive'spredetermined overhead rate for 2020 was computed from the following data:$2,400,000$2,000,000Total estimated factory overheadTotal estimated direct labour costThe WIP account given below relates to the activities of Exclusive Souvenirs for the month of June:WIP Inventory A/c$15,000June 1 Balance b/Direct Materials Used123,000Additional data:Total material requisitioned .• Manufacturing Labour Costs incurred• Other manufacturing overheads incurred• Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold tothe hotel on account at a margin of 33 1/3% on sales.$153,000$163,500 (75% represents direct labour)$94,275

predetermined overhead rate = estimated manufacturing overhead / estimated direct labor cost

Answered: Exclusive Souvenirs Hut does customize,…

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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a) Compute Exclusive Souvenirs predetermined manufacturing overhead rate for 2020.

b) State the journal entries necessary to record the following transactions in the general journal.
(i) Total materials issued to production
(ii) Manufacturing labour incurred
(iii) Assign manufacturing labour to the appropriate accounts
(iv) Other manufacturing overhead incurred
(v) Manufacturing overhead applied to production
(vi) Move completed jobs to finished goods
(vii) Account for jobs completed and sold

c) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. What is the balance on the account before performing end of period closing entries? Is manufacturing overhead under- or over- absorbed? State the journal entries necessary to dispose of the variance.
Assume that the manufacturing overhead variance is immaterial.

Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch of
zouvenirs is a job. 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. Exclusive's
predetermined overhead rate for 2020 was computed from the following data:
$2,400,000
$2,000,000
Total estimated factory overhead
Total estimated direct labour cost
The WIP account given below relates to the activities of Exclusive Souvenirs for the month of June:
WIP Inventory A/c
$15,000
June 1 Balance b/
Direct Materials Used
123,000
Additional data:
Total material requisitioned .
• Manufacturing Labour Costs incurred
• Other manufacturing overheads incurred
• Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold to
the hotel on account at a margin of 33 1/3% on sales.
$153,000
$163,500 (75% represents direct labour)
$94,275

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