Brighton Services repairs locomotive engines. It employs 100 full-time workers at $14 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs.

Direct materials	$	1,045,400
Direct labor		4,200,000
Manufacturing overhead		975,000

Of the $975,000 manufacturing overhead, 40 percent was variable overhead and 60 percent was fixed.

This year, Brighton Services expects to operate at the same activity level as last year, and overhead costs and the wage rate are not expected to change. For the first quarter of this year, Brighton Services completed two jobs and was beginning the third (Job 103). The costs incurred follow.

Job	Direct Materials			Direct Labor
101	$	138,200		$	490,000
102		103,000			313,000
103		95,000			195,200
Total manufacturing overhead					272,200
Total marketing and administrative costs					120,000

You are a consultant associated with Lodi Consultants, which Brighton Services has asked for help. Lodi's senior partner has examined Brighton Services's accounts and has decided to divide actual factory overhead by job into fixed and variable portions as follows.

	Actual Manufacturing Overhead
	Variable		Fixed
101	$	30,900	$	105,000
102		28,500		89,200
103		5,600		13,000
	$	65,000	$	207,200

In the first quarter of this year, 40 percent of marketing and administrative cost was variable and 60 percent was fixed. You are told that Jobs 101 and 102 were sold for $855,000 and $570,000, respectively. All over- or underapplied overhead for the quarter is written off to Cost of Goods Sold.

Required:

a. Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year.

b. Using last year's overhead costs and direct labor-hours as this year's estimate, calculate predetermined overhead rates per direct labor-hour for variable and fixed overhead.

c. Present in T-accounts the normal manufacturing cost flows for the three jobs in the first quarter of this year. Use the overhead rates derived in requirement (b).

d. Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems.

B.)

Predetermined Overhead Rate (Per Direct Labor-Hour)
Variable overhead rate	$1.30selected answer correct
Fixed overhead rate	$1.95

c.)

Materials Inventory					Wages Payable
Beg. Bal.	0selected answer correct	0selected answer correct			Beg. Bal.	0selected answer correct	0selected answer correct
not attempted	0selected answer correct	138,200selected answer correct	101: DMselected answer correct		not attempted	0selected answer correct	490,000selected answer correct	101: DLselected answer correct
not attempted	0selected answer correct	103,000selected answer correct	102: DMselected answer correct		not attempted	0selected answer correct	313,000selected answer correct	102: DLselected answer correct
not attempted	0selected answer correct	95,000selected answer correct	103: DMselected answer correct		not attempted	0selected answer correct	195,200selected answer correct	103: DLselected answer correct
not attempted	0selected answer correct	0selected answer correct	not attempted		not attempted	0selected answer correct	0selected answer correct	not attempted
End. Bal.		336,200			End. Bal.		998,200
Variable Manufacturing Overhead					Fixed Manufacturing Overhead
Actualselected answer correct	65,000selected answer correct	45,500selected answer correct	101: Variableselected answer correct		Actualselected answer correct	207,200selected answer correct	68,250selected answer correct	101: Fixedselected answer correct
Overappliedselected answer correct	27,690selected answer correct	29,064selected answer correct	102: Variableselected answer correct		not attempted	0selected answer correct	43,596selected answer correct	102: Fixedselected answer correct
not attempted	0selected answer correct	18,126selected answer correct	103: Variableselected answer correct		not attempted	0selected answer correct	27,189selected answer correct	103: Fixedselected answer correct
not attempted	0selected answer correct	0selected answer correct	not attempted		not attempted	0selected answer correct	0selected answer correct	not attempted
End. Bal.					not attempted	0selected answer correct	68,165selected answer correct	Underappliedselected answer correct
					End. Bal.
Work-in-Process Inventory					Finished Goods Inventory
Beg. Bal.	0selected answer correct	0selected answer correct			Beg. Bal.	0selected answer correct	0selected answer correct
Total DMselected answer correct	336,200selected answer correct	?????	Total 101 Finished Goodsselected answer correct		Total 101 Finished Goods	??????	??????	Cost of Goods Sold
Total DLselected answer correct	998,200selected answer correct	488,660selected answer correct	Total 102 Finished Goodsselected answer correct		Total 102 Finished Goodsselected answer correct	488,660selected answer correct	0selected answer correct	not attempted
Total Fixed MOHselected answer correct	?????	0selected answer correct	not attempted		not attempted	0selected answer correct	0selected answer correct	not attempted
Total Variable MOHselected answer correct	?????	0selected answer correct	not attempted		End. Bal.
not attempted	0selected answer correct	0selected answer correct	not attempted
End. Bal.	776,515
Cost of Goods Sold					Under-or Overapplied Overhead
Beg. Bal.	0selected answer correct	0selected answer correct			Beg. Bal.	0selected answer correct	0selected answer correct
Finished Goods	????	0selected answer correct			Underappliedselected answer correct	68,165selected answer correct	27,690selected answer correct	Overappliedselected answer correct
	0selected answer correct	0selected answer correct			not attempted	0selected answer correct	0selected answer correct	not attempted
End. Bal.	789,610				End. Bal.	40,475