Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch ofsouvenirs 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:Total estimated factory overhead$2,400,000Total estimated direct labour cost$2,000,000The WIP account given below relates to the activities of Exclusive Souvenirs for the month of June:WIP Inventory A/CJune 1 Balance b/f$15,000Direct Materials Used123,000Additional data:Total material requisitionedManufacturing Labour Costs incurred$153,000$163,500 (75% represents direct labour)Other manufacturing overheads incurred$94,275...........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.Required:а)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(viii)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? Ismanufacturing overhead under- or over- absorbed? State the journal entries necessary todispose of the variance. Assume that the manufacturing overhead variance is immaterial.

Overhead rate is mentioned in the given question: Total estimated factory overhead - $2,400,000…

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. (i) Total materials issued to production (ii) Manufacturing labour incurred (iii)Assign manufacturing labour to the appropriate accounts

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. (i) Total materials issued to production (ii) Manufacturing labour incurred (iii)Assign manufacturing labour to the appropriate accounts

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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