Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. A popular pastime among older Chinese men is to take their pet birds on daily excursions to teahouses and public parks where they meet with other bird owners to talk and play mahjong. A great deal of attention is lavished on these birds, and the birdcages are often elaborately constructed from exotic woods and contain poreclain feeding bowls and silver roosts. Gold Nest Company makes a broad range of birdcages that it sells through an extensive network of street vendors who receive commissions on their sales. The Chinese currency is the renminbi, which is denoted by Rmb. All of the company's transactions with customers, employees, and suppliers are conducted in cash; there is no credit.The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. At the beginning of the year, it was estimated that the total direct labor cost for the year would be Rmb200,000 and the total manufacturing overhead cost would be Rmb 330,000 . At the beginning of the year, the inventory balances were as follows:During the year, the following transactions were completed: a. Raw materials purchased for cash, Rmb 275,000 . b. Raw materials requisitioned for use in production, Rmb 280,000 (materials costing Rmb220,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: d. Rent for the year was Rmb 18,000 Rmb 13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, Rmb 57,000 . f. Advertising costs incurred, Rmb 140,000 . g. Depreciation recorded on equipment, Rmb 100,000. Rmb 88,000 of this amount was on equipment used in factory operations; the remaining Rmb 12,000 was on equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, Rmb ________. i. Goods that had cost Rmb 675,000 to manufacture according to their job cost sheets were completed. j. Sales for the year totaled Rmb 1,250,000 . The total cost to manufacture these goods according to their job cost sheets was Rmb 700,000 .
(c) Is Manufacturing Overhead underapplied or overapplied for the year? Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

At the end of the year, the balance in manufacturing overhead account (over or under-applied manufacturing overhead) is disposed off by either allocating it among work in process, finished goods and cost of goods sold accounts or transferring the entire amount to cost of goods sold account.
Manufacturing overhead (also referred to as factory overhead, factory burden, and manufacturing support costs) refers to indirect factory-related costs that are incurred when a product is manufactured. Along with costs such as direct material and direct labor, the cost of manufacturing overhead must be assigned to each unit produced so that Inventory and Cost of Goods Sold are valued and reported according to generally accepted accounting principles (GAAP).
Manufacturing overhead includes such things as the electricity used to operate the factory equipment, depreciation on the factory equipment and building, factory supplies and factory personnel (other than direct labor). How these costs are assigned to products has an impact on the measurement of an individual product's profitability.
Nonmanufacturing costs (sometimes referred to as administrative overhead) represent a manufacturer's expenses that occur apart from the actual manufacturing function. In accounting and financial terminology, the nonmanufacturing costs include Selling, General and Administrative (SG&A) expenses, and Interest Expense. Since accounting principles do not consider these expenses as product costs, they are not assigned to inventory or to the cost of goods sold. Instead, nonmanufacturing costs are simply reported as expenses on the income statement at the time they are incurred.

Trn. Account Titles Debit (Rmb) Credit(Rmb)

a) Raw Material Inventory 150000 Cash 150000

b) Work in process Inventory 135000

Manufacturing overhead 23000

Raw material Inventory 158000

c) Work in process Inventory 100000

Manufacturing overhead 40000

Sales commision 22000

Salaries expense 35000

Cash 197000

d) Manufacturing overhead 30000

Rent Expense 6000

Cash 36000

e) Manufacturing overhead 90000

Cash 90000

f) Advertising Expense 88000

Cash 88000

g) Manufacturing overhead 66000

Depreciation Expense 14000

Accumulated depreciation 80000

h) Work in process Inventory 250000

Manufacturing overhead 250000

[275,000/110,000] × 100,000 (Direct labor)

i) Finished goods 490000

Work in process Inventory 490000

j) Accounts Receivable 995000

Sales 995000

j. Cost of goods sold 550000

Finished goods Inventory 550000

To learn more about balance in the Manufacturing Overhead account to Cost,

https://brainly.com/question/26466781

#SPJ4