2. ABC Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Raw materials Work in process Finished goods Beginning Balance $70,000 135,000 310,000 Ending Balance $120,000 95,000 450,000 The company applies overhead to jobs using a predetermined overhead rate based on labor-hours. At the beginning of the year, the company estimated that it would work 165,000 labor-hours and incur $1,320,000 in manufacturing overhead cost. The following transactions were recorded for the year: Raw materials were purchased, $1,580,000 on account. Raw materials were requisitioned for used in production, $1,530,000 ($1,400,000 direct and $130,000 indirect). The following employee costs were incurred: direct labor, $1,800,000; indirect labor, $480,000; and administrative salaries, $860,000. Selling costs incurred, $830,000. Factory utility costs incurred, $50,000. Factory rent incurred, $60,000 Depreciation for the year was $630,000 of which $580,000 is related to factory operations and $50,000 is related to selling and administrative activities. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 170,000 labor-hours. Units finished were transferred to finished goods warehouse. (Compute the amount) Sales for the year totaled $6,250,000 on account. Finished goods account adjusted. (Compute COGS) equired: (you may ignore 3 zeros) a. Prepare journal entries, and post the ledger accounts. (You don't have to open every account, open the necessary ones) b. Prepare a schedule of cost of goods manufactured in good form. 2. ABC Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Raw materials Work in process Finished goods Beginning Balance $70,000 135,000 310,000 Ending Balance $120,000 95,000 450,000 The company applies overhead to jobs using a predetermined overhead rate based on labor-hours. At the beginning of the year, the company estimated that it would work 165,000 labor-hours and incur $1,320,000 in manufacturing overhead cost. The following transactions were recorded for the year: Raw materials were purchased, $1,580,000 on account. Raw materials were requisitioned for used in production, $1,530,000 ($1,400,000 direct and $130,000 indirect). The following employee costs were incurred: direct labor, $1,800,000; indirect labor, $480,000; and administrative salaries, $860,000. Selling costs incurred, $830,000. Factory utility costs incurred, $50,000. Factory rent incurred, $60,000 Depreciation for the year was $630,000 of which $580,000 is related to factory operations and $50,000 is related to selling and administrative activities. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 170,000 labor-hours. Units finished were transferred to finished goods warehouse. (Compute the amount) Sales for the year totaled $6,250,000 on account. Finished goods account adjusted. (Compute COGS) Required: (you may ignore 3 zeros) a. Prepare journal entries, and post the ledger accounts. (You don't have to open every account, open the necessary ones) b. Prepare a schedule of cost of goods manufactured in good form. c. Was the overhead under- or overapplied? By how much? d. Prepare an income statement for the year in good form. The company closes any under-or overapplied overhead to Cost of Goods Sold. c. (Hint: Use the beginning and ending balances of related accounts to find COGM and COGS)