Brighton Services repairs locomotive engines. It employs 100 full-time workers at $16 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 Direct labor Manufacturing overhead $1,053,400 4,320.000 1,080,000 Of the $1,080,000 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 Direct Materials Direct Labor Job 101 102 103 Total manufacturing overhead Total marketing and administrative costs $139,000 $507,000 111,000 314.400 95,800 195,900 273,000 128,000 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 S 31,700 29,300 Fixed 101 102 103 $105,800 90,000 9,800 $ 205,600 6.400 S 67,400 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 $880,000 and $586,000, 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. Materials Inventory Wages Payable Beg. bal Beg. bal 139,000 101: DM 111,000 102: DM 95,800 103: DM 0 507,000 101: D 314.400 102: DL 195,900 103: DL End. bal 345,800 End. bal 1,017,300 Variable Manufacturing Overhead Fixed Manufacturing Overhead 31,700 101: Variable 29,300 102: Variable 6,400 103: Variable 105,800 101: Fixed 90,000 102: Fixed 9,800 103: Fixed End. bal 67,400 End. bal 205,600 Work-in-Process Inventory Finished Goods Inventory Beg. bal Beg. bal 345,800 1,017,300 67,400 205,600 Cost of goods sold End. bal End. bal 1,636,100 Cost of Goods Sold Beg. bal Finished Goods End. bal b. Using last years overhead costs and direct labor-hours as this year's estimate, calculate predetermined overhead rates per direct labor-hour for variable and fixed overhead. (Round your answers to 2 decimal places.) Predetermined Overhead Rate (Per Direct Labor- Hour Variable overhead rate Fixed overhead rate 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). (Do not round intermediate calculations.) Materials Inventory Wages Payable Beg. bal. Beg. bal End. bal. End. bal Variable Manufacturing Overhead Fixed Manufacturing Overhead End. bal. End. bal Work-in-Process Inventory Finished Goods Inventory Beg. bal. Beg. bal. Cost of goods sold End. bal End. bal Cost of Goods Sold Under-or Over-Applied Overhead Beg. bal Finished Goods Beg. bal End. bal End. bal d. Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems. Actual Normal