Reference no: EM132508721

Question - Horton Company uses a job costing system, and manufacturing overhead is applied on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $1,050,000 of manufacturing overhead costs and use 70,000 machine hours. Horton Company recorded the following events during the month of March.

(a) Beginning balances:

Raw materials inventory (RM): $100,000

Work in process inventory (WIP): $150,000

Finished goods inventory (FGs): $30,000

(b) Purchased 200,000 kilograms of raw materials on account. The cost was $4.00 per kilogram.

(c) Issued 150,000 kilograms of materials to production. Assume all materials issued are at $4 per kilogram.

(d) Incurred $250,000 of direct labour costs and $50,000 of indirect labour costs.

(e) Recorded depreciation on equipment for the month, $18,000.

(f) Recorded $42,000 of insurance costs for the manufacturing property.

(g) Recorded $35,000 for utilities and other miscellaneous items for the manufacturing plant.

(h) Completed job M11 costing $170,000 and job M12 costing $800,000 during the month and transferred them to Finished Goods inventory account.

(i) Shipped job M12 to the customer during the month.

(i) Used 10,000 machine hours during March.

Required - Complete the relevant T- accounts to show the ?ow of costs through the company's manufacturing accounts.