Comprehensive problem for job order costing activities The Waterford Hi-Type Products Company makes office and general-purpose furniture for commercial and institutional custom- ers. Many of the company's products are manufactured as special orders; some are manufactured for general stock. All production is in job lots, and a job order cost system is used to measure the cost of products. At the end of July, the company had three jobs in production. The production costs to date on these jobs are shown on the open job costs sheets on the next two pages. Manufacturing overhead is applied to products at the rate of 80 percent of direct labor cost. Overhead is applied at the time direct labor is charged to jobs. Expected sales for the year are $840,000 and expected annual operating expenses are $156,000. The company has a net invest- ment in assets of $945,000. The July 31 inventory balances are $34,600 in Einished Goods and $27,900 in Raw Materials. During the first week of August the following transactions and events took place:

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Aug. 2 Purchased lumber costing $2,600, vinyl covering costing $900, and foam padding costing $700, all from the same supplier. Aug. 2 Started job 8745 to make office lounge chairs for Slater Company. Issued $1,550 of direct material to the job on requisition number MRQ12774. Aug. 3 Issued $900 of materials to job 8743 as reported in MRQ12775. Aug. 3 Issued $360 of cleaning compound and $175 of lubricating material to the factory maintenance department; MRQ12776. Aug. 4 Started the production of folding chairs for open stock with job 8746. Issued $1,880 of material to production with MRQ12777. Aug. 5 Completed job 8741, the production of 100 bar stools. Aug. 5 Received property tax bill for $8,500. Eighty percent is for the production facility.