Topic 2 - practice exam style question Ash & John manufactures tennis racquets. They produced and sold 1,000 racquets in December 2019. Each racquet was sold at $180. Ash & John had the following records for the period: Raw materials inventory, 1 December $ 42,500 Raw materials inventory, 31 December $ 28,000 Work-in-process (WIP), 1 December $ 33,500 Work-in-process (WIP), 31 December S 65,000 Finished goods, 1 December S 20,500 Finished goods, 31 December $ 9,500 Raw materials purchased $ 65,500 Indirect materials used $ 23,000 Direct manufacturing labour (820 hours) $ 24,600 Indirect manufacturing labour $ 18,600 Depreciation - production equipment $ 7,000 Rent - production plant $ 9,000 Rent - administration office $ 1.200 Salary - production manager S 6,000 Salary - administration manager $ 4,500 Other sales, general and admin costs $ 8,000 The company applies normal costing and uses direct labour hours as the allocation base to assign indirect manufacturing costs. The estimated direct labour hours for the period was 800 hours. Direct materials used were $57,000. The estimated overhead costs for the period was $60,000. The overhead costs applied to production are calculated by: overhead rate x actual direct labour hours incurred Required: A. Calculate the following amounts for the month December 2019: I. The overhead rate. II. Overhead costs applied to production. III. The over or under-allocated overhead costs. B. Prepare a Cost of Goods Manufactured and Sold Statement