Calculate the utility costs incurred in factory

Question

Sovereign Millwork, Ltd., produces reproductions of antique residential moldings at a plant located in Manchester, England. Because there are hundreds of products, some of which are made only to order, the company uses a job-order costing system. On July 1, the start of the company's fiscal year, inventory account balances were as follows:

Raw materials	£	10,500
Work in process	£	4,200
Finished goods	£	8,700

The company applies overhead cost to jobs on the basis of machine-hours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated £99,000 of manufacturing overhead for an estimated activity level of 45,000 machine-hours. During the year, the following transactions were completed:

a.	Raw materials purchased on account, £169,000.
b.	Raw materials requisitioned for use in production, £148,000 (materials costing £121,000 were chargeable directly to jobs; the remaining materials were indirect).
c.	Costs for employee services were incurred as follows:

Direct labor	£	98,000
Indirect labor	£	20,100
Sales commissions	£	26,000
Administrative salaries	£	43,000

d.	Prepaid insurance expired during the year, £18,600 (£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, £19,000.
f.	Advertising costs incurred, £10,000.
g.	Depreciation recorded on equipment, £23,000. (£16,000 of this amount was on equipment used in factory operations; the remaining £7,000 was on equipment used in selling and administrative activities.)
h.	Manufacturing overhead cost was applied to jobs, £? (The company recorded 37,000 machine-hours of operating time during the year.)
i.	Goods that had cost £287,000 to manufacture according to their job cost sheets were completed.
j.	Sales (all on account) to customers during the year totaled £500,000. These goods had cost £289,000 to manufacture according to their job cost sheets.

1.	Prepare journal entries to record the transactions for the year. (Round your intermediate calculations to 2 decimal places. Omit the "£" sign in your response.)