Boston Company uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2022, Job No. 23 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $12,000; direct labor $8,000; and manufacturing overhead $6,000. Job No. 21 had been completed at a cost of $44,000 and was part of finished goods inventory. There was a $4,000 balance in the Raw Materials Inventory account. During the month of January, the company began production on Jobs 24 and 25, and completed Jobs 23 and 24. Jobs 21 and 23 were sold on account during the month for $65,000 and $73,000, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $48,000 on account. 2. Incurred factory labor costs of $38,000. Of this amount, $8,000 related to employer navroll tavae 3. Incurred manufacturing overhead costs as follows: indirect materials $12,000; indirect labor $10,000; depreciation expense on equipment $12,000; and various other manufacturing overhead costs on account $11,000. 4. Assigned direct materials and direct labor to jobs as follows. Job No. 23 322 24 25 Direct Materials $6,000 15,000 14,000 Direct Labor $4,000 11,000 10,000 5. The company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job were as follows: Job No. 23, 180; Job No. 24, 700; and Job No. 25, 500. Instructions: (a) Calculate the predetermined overhead rate for the year 2022, assuming Boston Company estimates total manufacturing overhead costs of $600,000, direct labor costs of $450,000, and direct labor hours of 20,000 for the year. (b) Open job cost sheets for Jobs 23, 24, and 25. Enter the January 1 balances on the job cost sheet for Job No. 23 (c) Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January. (d) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary. (e) Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month. (f) Prepare the journal entry (or entries) to record the sale of any job(s) during the month. (g) What is the balance in the Work in Process Inventory account at the end of the month? What does this balance consist of? (h) What is the amount of over- or underapplied overhead? 1 2345 Predetermined Overhead Rate Caculate the Predetermined Overhead Rate Here: (b) and (e) Job Cost Sheets 1 12 3 20 4 5 JOB NO. 23 JOB NO. 24 Manu- Manu- Direct Direct facturing Direct Direct facturing 9 Date Materials Labor Overhead Date Materials Labor Overhead 0 Beg ++ Jan. 1 Jan. 2 23 24 25 Cost of completed job 26 Direct Materials 27 28 29 Direct Labor Manufacturing Overhead Total Cost Cost of completed job Direct Materials Direct Labor Manufacturing Overhead Total Cost 30 31 32 33 JOB NO. 25 34 35 Direct Direct Manu- facturing 36 Date Materials Labor Overhead 37 Jan. 38 39 Account Titles Debit Credit 1 (c) Raw Materials Inventory Accounts Payable 224 3 4 Factory Labor 56 Employer Payroll Taxes Payable Factory Wages Payable 7 8 Manufacturing Overhead 9 10 11 12 Accumulated Depreciation-Equipment Accounts Payable Raw Materials Inventory Factory Labor 1 12 13 14 (d) Work in Process Inventory 15 Raw Materials Inventory 16 17 18 Work in Process Inventory Factory Labor 18 15 19 20 20 Work in Process Inventory 21 21 Manufacturing Overhead 122 22 24 25 22222222 23 (e) Finished Goods Inventory Work in Process Inventory 26 27 1 Accounts Receivable 28 Sales Revenue 29 Cost of Goods Sold 30 Finished Goods Inventory NNNNNNNOS 23 24 25 26 27 2E 25 30 31 12 34 5 6 Beginning balance Direct materials Direct labor Manufacturing overhead 7 Ending balance 8 WORK IN PROCESS 10 11 Components of account balance: 12 The balance in this account consists of the current costs assigned to Job No. 25: Direct Materials 456 13 14 15 16 -- 17 18 0054 Direct Labor Manufacturing Overhead Total costs assigned 2 3 14 5 8 9 10 11 12 13 14 15 16 17 18 (h) 1 2 3 4 5 MANUFACTURING OVERHEAD Actual Applied 1 23 4 5 6 6. 7 7 8 9 10 8 9 10 11 Is the balance in Manufacturing Overhead underapplied, overapplied, or neither. 11 12 12 13 14 15 16 14 15 16 25