A. Syarikat Aman Sdn Bhd (SASB), which began operations on 1 January 2019, reported
the following information:
(RM)
Estimated manufacturing overhead = RM 600,000
Actual manufacturing overhead= RM 639,000
Estimated direct labour cost= RM 480,000
Actual direct labour cost =RM 500,000
Total debits in the Work-In-Process account =RM 1,880,000
Total credits in the Finished Goods account = RM920,000
SASB uses a normal costing system and applies manufacturing overhead to jobs on the basis of direct labour cost. A 60% markup is added to the completed production when finished goods are sold. On 31 December 2019, job no.18 was the only job in process. The job had direct material and direct labour charges of RM16,500 and RM36,000, respectively.
REQUIRED:
(a) Discuss THREE (3) criteria that differ job-order costing from process costing.
(b) Calculate the overapplied or underapplied manufacturing overhead for SASB and prepare a journal entry to record the amount of overapplied or underapplied overhead.
(c) Determine the total costs of direct materials used in production.