Reference no: EM132603165

Gtech Gear manufactures exclusive diving goggles which are tested by optometrists to ensure that the divers can still see clearly whilst diving. A job costing system is used due to the manufacturing process and specifications involved.

Gtech Gear has provided you with the following information on one of their orders:

Job order number: G-999 Direct materials $20 000

Direct manufacturing labour 200 hours

Direct manufacturing labour cost per hour $65

Production overhead costs are allocated based on the number of direct manufacturing labour hours. Budgeted overhead costs for the year was $500 000 with the number of direct manufacturing labour hours budgeted at 40 000 hours for the year.

Assume that, at the end of the year the actual number of direct manufacturing labour hours was 45 000 hours for the year and that the actual overhead costs was $600 000.

Required:

Question 1: Prepare the journal entries related to Job: G-999 (you must include entries related to: (i) materials (ii) manufacturing labour (iii) both actual and allocated manufacturing overhead (iv) transfer of Job G-999 to finished goods and (v) write-off under/overallocation of overhead to COGS)