1.Mason Company and Rodd Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year.

	Mason Company			Rodd Company
Actual manufacturing overhead	$	139,450		$	222,900
Actual direct labor hours		21,000			22,000
Underapplied overhead					15,000
Overapplied overhead		27,500

A. Compute the predetermined overhead rate for each company. (Round your answers to 2 decimal places.)

Per Direct Labor Hour

Mason Company Rodd Company

Predetermined Overhead Rate

B.

Using T-accounts, record applied and actual overhead and the entry to close the overapplied or underapplied overhead at the end of the accounting period for each company, assuming the amounts are immaterial.

Adjusting Entry for Mason Company:

manufacturing overhead Cost of Good Sold

2.

Miller Manufacturing Company started operations on January 1, 2015. During 2015, the company engaged in the following transactions.

1.

Issued common stock for $76,000.

2.

Paid $34,000 cash to purchase raw materials used to make products.

3.

Transferred $25,000 of raw materials to the production department.

4.

Paid $27,500 cash for labor used to make products.

5.

Paid $43,000 cash for overhead costs (assume actual and estimated overhead are the same).

6.

Finished work on products that cost $84,000 to make.

7.

Sold products that cost $70,000 to make for $92,000 cash.

A. Prepare the December 31, 2015, balance sheet. For Miller Manufacturing Company Assets Cash Raw materials Inventory Work in progress Inventory Finish Goods Inventory Cash Total Assets Equity Total Equity B. Prepare the December 31, 2015, income statement