Reference no: EM132556846
Strathfield Ltd manufactures lawnmowers and uses job costing. Manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $500,000, and the expected machine hours for the year is 20 000 machine hours. At the end of each month, Strathfield Ltd closes the over-applied or under-applied manufacturing overhead to the cost of goods sold account.
The following balances were recorded in the accounts of Strathfield Ltd:
1 April 2020 30 April 2020
Direct Material 13,250 Opening 15,600 closing
Indirect Material 1,335 opening 2,035 closing
Work-in-Process 17,975 opening 21,570 closing
The following events occurred in April 2020:
a. Purchased direct material on credit for $18,850.
b. Indirect materials of $2,200 purchased in cash.
c. Paid the factory electricity account of $650 in cash.
d. Recorded depreciation for the month of $3,500 on factory equipment and $2,000 on administration assets.
e. Incurred and paid the wages for the month; $35,000 for direct labour and $21,000 for indirect labour.
f. April's adjustment for insurance cost on manufacturing equipment is $520. The premium was prepaid at the beginning of the financial year.
g. Incurred and paid other factory overhead costs, $10,500.
h. Paid advertising expenses in cash, $5,500.
i. Incurred miscellaneous selling and administrative expenses, $13,250.
j. Actual machine hours recorded for April, 1 535 machine hours.
Overhead is applied on the basis of machine hours
Question 1: How do i prepare a schedule of costs of goods manufactured for the month ended 30 April 2020. Show the actual manufacturing overhead, over/under-applied manufacturing overhead and applied manufacturing overhead
Question 2: what is the journal entry to close the Manufacturing overhead account at the end of the month.