Certus Corporation uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 100 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials - $20,000; direct labor - $12,000; and manufacturing overhead - $16,000. As of January 1, Job 99 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account.

During the month of January, Certus Corporation began production on jobs 101 and 102, and completed jobs 100 and 101. Jobs 99 and 100 were also sold on account during the month for $122,000 and $158,000, respectively.

The following additional events occurred during the month:

1. Purchased additional raw materials of $90,000 on account.

2. Incurred factory labor costs of $70,000. Of this amount, $16,000 related to employer payroll taxes.

3. Incurred manufacturing overhead costs as follows: indirect materials - $17,000; indirect labor -

   $20,000; depreciation expense on equipment - $12,000; and various other manufacturing overhead

   costs on account - $16,000

4. Assigned direct materials and direct labor as follows:

Job No.

100 101 102

Direct Materials

$10,000 $39,000 $30,000

Direct Labor

$5,000 $25,000 $20,000

Instructions:

1. (a) Calculate the predetermined overhead rate for 2020 assuming Certus Corporation estimates total manufacturing overhead costs of $840,000; direct labor costs of $700,000, and direct labor hours of 20,000 for the year.

2. (b) Open job costs sheets for Jobs 100, 101, and 102. Enter the January 1 balances on the job cost sheet for Job 100.

3. (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.

4. (d) Prepare journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead. In assigning manufacturing overhead costs, use the overhead rate calculated in (a) above. Post all costs to the job sheets as necessary.

5. (e) Total all job costs sheets for any job(s) completed during the month. Prepare the journal entry (of entries) to record the completion of any job(s) during the month.

6. (f) Prepare the journal entry (or entries) to record the sale of any job(s) during the month.

7. (g) What is the amount of over- or underapplied overhead, if any? If none, enter NONE.