Dobson Manufacturing Company uses a job order cost 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 $65,000 and its total manufacturing over-head cost to be $91,000.

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 thecompany.

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Raw Materials Inventory Work in Process Inventory 30,000 70,000 $50,000 Beginning Balance15,000? Beginning Balance Direct Materials Direct Lahor Applied Overhead 95,000 Ending Balance Ending Balance 20,000 Finished Goods Inventory Cost of Goods Sold 40,000? Beginning Balance Cost of Goods Unadjusted Cost of Goods Sold Completed Ending Balance Adjusted Cost of Goods Sold 50,000 Manufacturing Overhead Sales Revenue Indirect Materials Indirect Lahor Factory Depreciation Factory Rent Factory Utilities Other Factory Costs Actual Overhead 10,000 Applied Overhead 15,000 13,000 7,000 3,000 10,000 58,000 Selling, General, and Administrative Expenses Adm. Salarics Office Deprec 20,000 Advertising Ending Balance 63,000