During March, the first month of operations, ACME Inc. worked on several different jobs. ACME Inc....

 

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During March, the first month of operations, ACME Inc. worked on several different jobs. ACME Inc. applies overhead to jobs using a predetermined overhead rate based on direct labour hours. At the beginning of the year, the company estimated that it would work 50,000 direct labour hours and that it would incur $700,000 in manufacturing overhead cost. Summary data concerning this job is as follows: a. Direct materials used were $50,000. Indirect materials used were $10,000. b. Indirect labour was $6,000. Direct labour was $75,000. c. Advertising costs were paid, $5,400. d. Manufacturing overhead incurred on account (not including indirect materials and indirect labour) totaled $40,000. e. Manufacturing overhead was applied to the jobs. There were 3,500 direct labour hours worked on jobs during the month. f. One job, A03, was still in process at the end of the month. The job cost sheet for job A03 showed total materials, labour and manufacturing overhead costs so far of $60,000. All other jobs were completed during the month. Required: 1. Prepare general journal entries on the general journal provided to record the above events. (Identify each journal entry by letter in the date column.) (9 marks) 2. What is the ending balance in the Work In Process account? (1 mark). 3. Is the overhead over applied or under applied and by how much? (2 marks) (A separate table below the general journal is provided for your responses to parts 2 & 3) During March, the first month of operations, ACME Inc. worked on several different jobs. ACME Inc. applies overhead to jobs using a predetermined overhead rate based on direct labour hours. At the beginning of the year, the company estimated that it would work 50,000 direct labour hours and that it would incur $700,000 in manufacturing overhead cost. Summary data concerning this job is as follows: a. Direct materials used were $50,000. Indirect materials used were $10,000. b. Indirect labour was $6,000. Direct labour was $75,000. c. Advertising costs were paid, $5,400. d. Manufacturing overhead incurred on account (not including indirect materials and indirect labour) totaled $40,000. e. Manufacturing overhead was applied to the jobs. There were 3,500 direct labour hours worked on jobs during the month. f. One job, A03, was still in process at the end of the month. The job cost sheet for job A03 showed total materials, labour and manufacturing overhead costs so far of $60,000. All other jobs were completed during the month. Required: 1. Prepare general journal entries on the general journal provided to record the above events. (Identify each journal entry by letter in the date column.) (9 marks) 2. What is the ending balance in the Work In Process account? (1 mark). 3. Is the overhead over applied or under applied and by how much? (2 marks) (A separate table below the general journal is provided for your responses to parts 2 & 3)

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Here are the general journal entries to record the above events Date Account Title and Explanation D... View the full answer