0 Unique Construction, Inc. is a home builder in Arizona. Unique uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,100,000 and total direct labor cost of $2,200,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements. Requirement 1. Calculate Unique's predetermined overhead allocation rate for the year. Predetermined overhead Actual overhead cost Estimated direct labor cost allocation rate % Requirement 2. Prepare journal entries to record the events in the general journal. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Purchased materials on account, $430,000. Date Accounts Debit Credit a. Raw Materials Inventory Accounts Payable b. Requisitioned direct materials and used direct labor in construction. Record the materials requisitioned. Date Accounts Debit Credit b. Work-in-Process Inventory Raw Materials Inventory c. The company incurred total wages of $200,000. Use the data from Item b to assign the wages. (Assume the wages have not been paid.) Date Accounts Debit Credit C. Work-in-Process Inventory Construction Overhead Wages Payable d. Depreciation of construction equipment, $6,600 Date Accounts Debit Credit d. Construction Overhead Accumulated Depreciation-Equipment e. Other overhead costs incurred: Equipment rentals paid in cash, $31,000; Worker liability insurance expired, $7,000. (Prepare a single journal entry for this event.) Date Accounts Debit Credit e. Construction Overhead Cash Prepaid Insurance f. Allocated overhead to jobs. Date Accounts Debit Credit f. Work-in-Process Inventory Construction Overhead g. Houses completed: 402, 404 Date Accounts Debit Credit g. Finished Goods Inventory Work-in-Process Inventory h. House sold on account: 404 for $230,000 Begin by recording the revenue from the sale on account. Do not record the expense related to the sale in this journal entry. We will do that in the next step. Date Accounts Debit Credit h. Accounts Receivable Sales Revenue Now record the cost of goods sold from the sale of house 404. Date Accounts Debit Credit h. Cost of Goods Sold Finished Goods Inventory h. House sold on account: 404 for $230,000 Begin by recording the revenue from the sale on account. Do not record the expense related to the sale in this journal entry. We will do that in the next step. Date Accounts Debit Credit h. Accounts Receivable Sales Revenue Now record the cost of goods sold from the sale of house 404. Date Accounts Debit Credit h. Cost of Goods Sold Finished Goods Inventory Requirement 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. Click to view the journal entries you prepared above. Work-in-Process Inventory Finished Goods Inventory Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unique Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Unfinished houses: Direct Materials Direct Labor Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. Unique Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unique Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Unfinished houses: Direct Materials Direct Labor Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. Unique Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unique Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Unfinished houses: Direct Materials Direct Labor Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. Unique Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. Unique Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Completed, unsold house: Direct Materials Direct Labor Construction Overhead Total cost equals Ending Finished Goods Inventory Requirement 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Unique Construction? Unique Construction, Inc. Gross profit on Homes Sold In August Gross profit X i - More Info a. Purchased materials on account, $430,000 b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. Direct Materials Direct Labor House 402 $ 42,000 54,000 $ 62,000 House 403 39,000 House 404 61,000 58,000 House 405 80,000 57,000 C. The company incurred total wages of $200,000. Use the data from Item b to assign the wages. Wages are not yet paid. d. Depreciation of construction equipment, $6,600 e. Other overhead costs incurred: Equipment rentals paid in cash, $31,000; Worker liability insurance expired, $7,000. f. Allocated overhead to jobs. g. Houses completed: 402, 404 h. House sold on account: 404 for $230,000 Print Done Unique Construction, Inc. is a home builder in Arizona. Unique uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,100,000 and total direct labor cost of $2,200,000. The following events occurred during August: Aclick the icon to view the events )