Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch of souvenirs 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: Total estimated factory overhead $2,400,000 Total estimated direct labour cost $2,000,000 The WIP account given below relates to the activities of Exclusive Souvenirs for the month of June: WIP Inventory A/c June 1 Balance b/f $15,000 Direct Balance Used 123,000 Additional data: • Total material requisitioned.. . $153,000 • Manufacturing Labour Costs incurred.. $163,500 (75% represents direct labour) • Other manufacturing overheads incurred . $94,275
Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch of souvenirs 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: Total estimated factory overhead $2,400,000 Total estimated direct labour cost $2,000,000 The WIP account given below relates to the activities of Exclusive Souvenirs for the month of June: WIP Inventory A/c June 1 Balance b/f $15,000 Direct Balance Used 123,000 Additional data: • Total material requisitioned.. . $153,000 • Manufacturing Labour Costs incurred.. $163,500 (75% represents direct labour) • Other manufacturing overheads incurred . $94,275
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please assist with questions A and B (i-iii)
thank you!!!
Transcribed Image Text:Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch of
souvenirs 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:
Total estimated factory overhead $2,400,000
Total estimated direct labour cost $2,000,000
The WIP account given below relates to the activities of Exclusive Souvenirs for the month of June:
WIP Inventory A/C
June 1 Balance b/lf
$15,000
Direct Balance Used
123,000
Additional data:
• Total material requisitioned .
$153,000
• Manufacturing Labour Costs incurred
$163,500 (75% represents direct labour)
• Other manufacturing overheads incurred
$94,275
........
Transcribed Image Text:• ther manufacturing overheads incurred
$94,275
. 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.
Required:
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.
1) Total materials issued to production
(ii) Manufacturing labour incurred
(ii)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
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