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Systems Design: Job-Order Costing Chapter 5 Ravsten Company uses a job -order costing system. On January 1. the beginning of the year the company's inventory balances were as follows: current PROBLEM S-18 Journal Entries TAccounts: Cost Flows IL04. LOS. LO7I $ 16000 s 10000 $30000 Work in Process Finished Goods.... For the current year The company a the company estimated that it would work 36.000 machine-hours and incur $153000 in man- ufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased on account: $200000. h Raw materials were requisitioned for use in production: $190.000 (80% direct and 20% indirect). The following costs were incurred for employee services: c. $160.000 27000 $ 36000 $80000 Sales commissions d. Heat. power and water costs were incurred in the factory: $42.000. Prepaid insurance expired during the year: $10.000 (90% relates to factory operations and 10% relates to selling and administrative activities). e. f Advertising costs were incurred. $50,000 preciation was recorded for the year s60000 (85% relates to factory &. De h Manufacturing overhead cost was applied to production. The company recorded 40000 . Goods that cost $480.000 to manufacture according to their job cost sheets were trans Sales for the year totalled $700.000 and were all on account. The total cost to manufacture operations, and 15% relates to selling and administrative activities). machine-hours for the year ferred to the finished goods warehouse. these goods according to their job cost sheets was $475.000. Required Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for inventories. Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these Taccounts (don't forget to enter the open- ing balances in your inventory accounts). Com 3. Is Manufacturing Overhead underapplied or overa pute an ending balance in each account. entry to properly dispose of any balance in the M Prepare an income statement for the year. (Do manufactured: all of the information needed for pplied for the year? Prepare a journa anufacturing Overhead account. l 4. not prepare a schedule of cost of journal entries and T-accounts you have prepared the income statement is available in the PROBLEM 5-19 T-Accounts: Applying Overhon