Reference no: EM132573748

Paluhengo Manufacturing uses a job order cost accounting system. On October 1, the company has a balance in Work in Process Inventory of Tshs.5,500 and two jobs in process:

Job No. 429, Tshs.3,000 and Job No. 430, Tshs.2,500.

During October, a summary of source documents reveals the following:

For

Materials Requisition Slips       Labour        Time Tickets

Job No. 429                      Tshs.3,500              Tshs.4,400

Job No. 430                            2,600                  3,400

Job No. 431                             3,400                  4,200

Job No. 432                            3,000                  4,000

General Use                                1,000              1,500

                                          Tshs.13,500             Tshs.17,500

Paluhengo Manufacturing applies manufacturing overhead to jobs at an overhead rate of 70% of direct labour cost.

Job No. 429 is completed during the month.

Instructions

Question (a)

Prepare summary journal entries to record the requisition slips, time tickets, the assignment of manufacturing overhead to jobs, and the completion of Job No. 429. Show computations.

Question (b) Answer the following questions.

1. What is the balance in Work in Process Inventory at October 31?

2. If Paluhengo Manufacturing incurred Tshs.8,000 of manufacturing overhead in addition to indirect materials and indirect labour, was overhead over- or underapplied in October and by how much?