One Stop Invitations & More does customize, hand-crafted wedding memorabilia, in which each batch of items is a job. The company has a highly labour-intensive production process, so it allocates manufacturing overhead based on direct labour hours. The business expects to incur $2,400,000 of manufacturing overhead costs and to use 40,000 direct labour hours during 20X9. At the end of June 20X9, One Stop Invitations & More reported the following inventories: Raw Materials Inventory Work-in-Progress Inventory Finished Goods Inventory $200,000 $170,000 $110,000 During July 20X9, One Stop Invitations & More actually used 3,000 direct labour hours and recorded the following transactions: i) Purchased materials on account $310,000 ii) Manufacturing wages incurred $400,000 iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000 iv) Assigned manufacturing wages, 90% direct labour, 10% indirect labour v) Other manufacturing overhead incurred $130,000 vi) Allocated manufacturing overhead for July 20X9 vii) Cost of jobs completed $995,000 viii) Cost of jobs sold (on account) at a margin of 33⅓%    $960,000 Answer the following: c) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial.  d) What is the balance in the Cost of Goods Sold account after the adjustment? Please follow the format given in the image attached when answering questions c and d.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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One Stop Invitations & More does customize, hand-crafted wedding memorabilia, in which each batch of items is a job. The company has a highly labour-intensive production process, so it allocates manufacturing
overhead based on direct labour hours. The business expects to incur $2,400,000 of manufacturing overhead costs and to use 40,000 direct labour hours during 20X9. At the end of June 20X9, One Stop Invitations & More reported the following inventories:

Raw Materials Inventory
Work-in-Progress Inventory
Finished Goods Inventory
$200,000
$170,000
$110,000

During July 20X9, One Stop Invitations & More actually used 3,000 direct labour hours and recorded the following transactions:

i) Purchased materials on account $310,000

ii) Manufacturing wages incurred $400,000
iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000
iv) Assigned manufacturing wages, 90% direct labour, 10% indirect labour
v) Other manufacturing overhead incurred $130,000
vi) Allocated manufacturing overhead for July 20X9
vii) Cost of jobs completed $995,000
viii) Cost of jobs sold (on account) at a margin of 33⅓%    $960,000

Answer the following:

c) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial. 

d) What is the balance in the Cost of Goods Sold account after the adjustment?

Please follow the format given in the image attached when answering questions c and d.

e) Calculating Manufacturing Overhead Variances
Manufacturing Overhead A/C
Adjusting Journal Entry
?
?
d) Calculating Adjusted COGS
Adjusted COGS
I| ||||
Transcribed Image Text:e) Calculating Manufacturing Overhead Variances Manufacturing Overhead A/C Adjusting Journal Entry ? ? d) Calculating Adjusted COGS Adjusted COGS I| ||||
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