Reference no: EM132664382
Apple Ltd manufactures all types of custom-made premium head wears and hats for all types of occasions. It uses a job-costing system and applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totalled $1,600,000. It has a maximum capacity of 400,000 machine hours. However, it is budgeted to be able to use 80% of this capacity during this period.
On 31 July, Apple Ltd has the following balances:
Work in process inventory
Job number 211 $22,500
Job number 212 $10,775
Raw materials inventory $16,700
Finished goods inventory
Job number 210 $28,750
In August, the following occurred:
(1) Raw materials purchased on credit $6,050
(2) Raw materials requisitions
- Job number 211 $1,275
- Job number 212 $750
- Job number 213 $3,100
- Indirect materials (used in production)$750(3) Machine hours, direct labour hours and wages for factory employees
- Job number 211 - 3,000 machines hours, 2,900 labour hours, wages $30,600
- Job number 212 - 1,100 machines hours, 900 labour hours, wages $10,800
- Job number 213 - 4,875 machines hours, 3,575 labour hours, wages $50,125
- indirect labour - 750 labour hours, wages $ 7,350(4) Spoilage & reworked costs
- Job number 211-Normal spoilage with estimated disposal selling price of $75 was incurred.
- Job number 212-Normal spoilage amounting to $88 and abnormal spoilage of $38 were incurred.
- Job number 213-Rework cost of $65 was incurred.(5) Job number 211 and Job number 212 were completed during the month.
Problem 1: Calculate the Work in process as at 31 august.