Dobson Manufacturing Company uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be \($50,000\) and its total manufacturing over¬ head cost to be \($75,000.\)

Several incomplete general ledger accounts showing the transactions that occurred during the most recent accounting period follow:

Required:
1. Calculate the predetermined overhead rate.

2. Fill in the missing values in the T-accounts.

3. Compute over- or underapplied overhead.

4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over or underapplied overhead.

5. Prepare a brief income statement for the company.

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Beginning Balance Raw Materials Inventory 15,000 ? 95,000 Purchases Ending Balance 30,000 Work in Process Inventory Beginning Balance 30,000 ? Direct Materials 70,000 Direct Labor 40,000 Applied Overhead ? Ending Balance 20,000 Cost of Goods Sold Unadjusted Cost of Beginning Balance Completed Finished Goods Inventory 40,000 1 Cost of Goods Ending Balance 50,000 Goods Sold Adjusted Cost of Goods Sold Manufacturing Overhead Indirect Materials 10,000 ? Indirect Labor 15,000 Factory Depreciation 13,000 Factory Rent 7,000 Factory Utilities 3,000 Other Factory Costs 10,000 Actual Overhead 58,000 Applied Overhead ? Sales Revenue 300,000 Sales Rever Selling and Administrative Expenses Adm. Salaries 28,000 Office Depreciation 20,000 Advertising 15,000 Ending balance 63,000