PART 1One Stop Invitations & More does customize, hand-crafted wedding memorabilia, in which each batch ofitems is a job. The company has a highly labour-intensive production process, so it allocates manufacturingoverhead based on direct labour hours. The business expects to incur $2,400,000 of manufacturingoverhead costs and to use 40,000 direct labour hours during 20X9.At the end of May June 20X9, One Stop Invitations & More reported the following inventories:Raw Materials Inventory$200,000Work-in-Progress Inventory $170,000Finished Goods Inventory$110,000During July 20X9, One Stop Invitations & More actually used 3,000 direct labour hours and recorded thefollowing transactions.i)Purchased materials on account$310,000ii)Manufacturing wages incurred$400,000iii)Materials requisitioned (includes $30,000 of indirect materials)$420,000iv)Assigned manufacturing wages, 90% direct labour, 10% indirect labourv)Other manufacturing overhead incurred$130,000vi)Allocated manufacturing overhead for July 20X9vii)Cost of jobs completed$995,000vii)Cost of jobs sold (on account) at a margin of 333%$960,000Required:(a)Compute One Stop's predetermined manufacturing overhead rate for 20X9.State the journal entries necessary to record the above transactions in the general journal.Assume that One Stop uses the perpetual inventory system.(b)Post the manufacturing overhead transactions to the Manufacturing Overhead T-account,clearly showing the balance before closing the account. State the journal entries necessary todispose of the variance. Assume that the manufacturing overhead variance is immaterial.(c)(d)What is the balance in the Cost of Goods Sold account after the adjustment?(e)Compute One Stop's gross profit earned on the jobs sold, after adjusting for the manufacturingoverhead variancePost the appropriate entries to Materials Inventory, Work-in-Process Inventory and FinishedGoods Inventory accounts and determine each account balance on July 31, the end of themonth.(f) PART 2Michael's Pottery makes decorative garden pieces using three consecutive processes: Moulding, Baking &Spraying. Quality control check takes place during the process, at which point, rejected units are separated fromgood units.The following details relate to production for the month of October 2020, for the Baking Department.i)Work-in-process, October 1: -0-ii)Transfer from Moulding: 2,000 units valued at $336.40 eachiii)Other manufacturing costs incurred during October:Direct material addedDirect Manufacturing Wages$202,120$212,840Manufacturing Overhead Applied$306,160iv)Normal losses are estimated to be 5% of the units transferred in during the period. Losses from theBaking Department are deemed to be scrap and sold at $382 each.v)At inspection 300 decorative pieces were rejected as scrap. These units had reached the followingdegree of completion:From Moulding100%Direct material added40%Conversion costs12½%vi)1,200 pieces were completed and transferred out to the Spraying Department.vii)Work-in-process at the end of October had reached the following degree of completion:From Moulding100%Direct material added70%Conversion costs55%Direct materials added and conversion costs are incurred uniformly throughout the process.Required:Prepare a statement of equivalent production to determine the equivalent units for direct materials(From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for(a)direct materials and conversion costs.(b)Calculate the:Total cost of units completed and transferred to the Spraying DepartmentCost of abnormal lossesCost of ending work-in-process inventory in the Baking DepartmentPrepare Michael Pottery's Work-In-Process Inventory - Baking Department T-account, clearly showingthe ending balance.(c)State the journal entries necessary to record the assignment of direct materials, direct manufacturingwages and manufacturing overhead applied to the Baking Department. Also give the journal entries torecord the cost of goods completed and transferred to the Spraying Department.(d)Given that 25% of the unexpected losses were because of pilferage, prepare the abnormal spoilagestatement, clearly showing Michael Pottery's true loss.(e)

SOLUTION- JOURNAL ENTRY- A JOURNAL IS THE COMPANY'S OFFICIAL BOOK IN WHICH ALL TRANSACTIONS ARE…

PART 1 One Stop Invitations & More does customize, hand-crafted wedding memorabilia, in which each batch of items is a job. The company has a highly labour-intensive production process, so it allocates manufacturing overhead based on direct labour hours. The business expects to incur $2,400,000 of manufacturing overhead costs and to use 40,000 direct labour hours during 20X9. At the end of May June 20X9, One Stop Invitations & More reported the following inventories: Raw Materials Inventory $200,000 Work-in-Progress Inventory $170,000 Finished Goods Inventory $110,000 During July 20X9, One Stop Invitations & More actually used 3,000 direct labour hours and recorded the Following transactions. i) Purchased materials on account $310,000 ii) Manufacturing wages incurred $400,000 ii) Materials requisitioned (includes $30,000 of indirect materials) $420,000 iv) Assigned manufacturing wages, 90% direct labour, 10% indirect labour v) Other manufacturing overhead incurred $130,000 vi) Allocated manufacturing overhead for July 20X9 vii) Cost of jobs completed $995,000 iii) Cost of jobs sold (on account) at a margin of 333% $960,000 equired: (a) Compute One Stop's predetermined manufacturing overhead rate for 20X9. State the journal entries necessary to record the above transactions in the general journal. Assume that One Stop uses the perpetual inventory system. (b) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial. (c) (d) What is the balance in the Cost of Goods Sold account after the adjustment? Compute One Stop's gross profit earned on the jobs sold, after adjusting for the manufacturing overhead variance (e) Post the appropriate entries to Materials Inventory, Work-in-Process Inventory and Finished Goods Inventory accounts and determine each account balance on July 31, the end of the month. (f)