Please answer questions Elite Home Decor manufactures customized household furnishings. The company uses a perpetual inventory system and has a highlylabour intensive production process, so it assigns manufacturing overhead based on direct labour cost. Elite expects to incur $2,205,000 ormanufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2020.At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000 The following events occurredduring January - March 2020.i) Purchased materials on account, $392,000ii) Incurred manufacturing wages of $400,000iii) Requisitioned direct materials and used direct labour in manufacturingDirect MaterialsDirect LabourJob 551$70,200$61,200Job 55297,500115,600Job 553105,30078,200Job 554117,00085,000iv) Issued indirect materials to production, $30,000v) Charged indirect manufacturing wages to production, $60,000vi) Depreciation of production machinery, $85,000vii) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $49,000viii)Allocated overheads to jobs at the predetermined rateix) Units completed: 551, 552 & 554 ParagraphArrange2.5 16 17.1012 1 13 14 115 11620 1 21 1 22 1 23 1 2417 118 119x) Sold units 551 & 554 (billed customers at a margin of 333% on salesRequired:(a)Compute Elite's predetermined manufacturing overhead rate for 2020.(b)Calculate the total manufacturing costs for each job.(c)Using the total figures, record the above transactions in the general journal.Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closingthe account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is(d)immaterial.(e)What is the balance in the Cost of Goods Sold account after the adjustment?(f)Compute Elite's gross profit earned on the jobs sold, after adjusting for the manufacturing overhead variance(g)Post the appropriate entries to Work in Process Inventory account & determine the account balance on March 31, the end of thequarter.

(a) Predetermined overhead Estimated average / Estimated Direct Labor cost 2205000 / 3150000 =$0.70

Elite Hame Decor manufactures customized household furnishi labour intensive production process, so it assigns manufacturing manufacturing overhead costs and estimated direct labour cost At the end of December 2019, Elite reported work in process during January -March 2020. i) Purchased materials on account, $392,000 ECA00 000

Elite Hame Decor manufactures customized household furnishi labour intensive production process, so it assigns manufacturing manufacturing overhead costs and estimated direct labour cost At the end of December 2019, Elite reported work in process during January -March 2020. i) Purchased materials on account, $392,000 ECA00 000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 13P: Webster Company uses backflush costing to account for its manufacturing costs. The trigger points...

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Elite Home Decor manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labour intensive production process, so it assigns manufacturing overhead based on direct labour cost. Elite expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2020. At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000 The following events occurred during January - March 2020. i) Purchased materials on account, $392,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing Direct Materials Direct Labour Job 551 $70,200 $61,200 Job 552 97,500 115,000Job 553 105,300…
Elite Home Decor manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labour intensive production process, so it assigns manufacturingoverhead based on direct labour cost. Elite expects to incur $2,205,000 of manufacturing overhead costsand estimated direct labour costs of $3,150,000 during 2020. At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000. The following events occurred during January - March 2020.i) Purchased materials on account, $392,000ii) Incurred manufacturing wages of $400,000iii) Requisitioned direct materials and used direct labour in manufacturing Direct Materials Direct LabourJob 551 $70,200 $61,200Job 552 $97,500 $115,600Job 553 $105,300 $78,200Job 554 $117,000 $85,000 iv)…