MyGame Station Sdn Bhd makes gaming devices using latest automated technology. The company uses a job-order costi
QUESTION 2
MyGame Station Sdn Bhd makes gaming devices using latest automated technology. The company uses a
|
Machine hours |
22,500 |
|
Manufacturing overhead cost |
RM320,000 |
During the year 2020, a surplus of gaming devices on the market resulted in cutting back production. The company’s cost records revealed the following actual cost and operating data for the year:
|
Machine hours |
25,000 |
|
Manufacturing overhead cost |
RM385,000 |
|
Inventories at year-end: |
|
|
Raw Materials |
RM12,000 |
|
Work in process (includes overhead applied of RM12,000) |
RM40,000 |
|
Finished goods (includes overhead applied of RM40,000) |
RM150,000 |
|
Cost of goods sold (includes overhead applied of RM152,000) |
RM400,000 |
- Determine how much of the underapplied or overapplied overhead computed in (2) will be allocated to Work In Process (WIP), Finished Goods (FG) and Cost of Goods Sold (COGS) on the basis of the amount of overhead applied that remains in each account at the end of the year.
- Prepare
journal entry to record the underapplied or overapplied overhead computed in (c).
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