Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $15,300 5,900 21,200 The following transactions occurred during January: (a) Purchased materials on account for $27,900. (b) Issued materials to production totaling $21,900, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $17,600 were recorded as follows: $10,100 for assembly workers 2,100 for factory supervision 2,900 for administrative personnel 2,500 for sales commissions (d) Recorded depreciation: $5,400 for factory machines, $1,100 for the copier used in the administrative office. (e) Recorded $1,200 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $6,000 in other factory costs in cash. (g) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. (n) Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,600 for direct materials, $2,400 for direct labor, and $4,800 for applied overhead. (1) Sold jobs costing $50,400. The revenue earned on these jobs was $65,520. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling, General, and Administrative Expenses. g. Sales Revenue. 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. Raw Materials Inventory Work in Process Inventory Beg. Bal. 15,300 Beg. Bal. 5,900 (a) 27,900 21,900 (b) (b) 19,710 46,110(h) (c) 10,100 End. Bal. 21,300 (g) 20,200 End. Bal. 9,800 Cost of Goods Sold Beg. Bal. (n) Finished Goods Inventory 21,200 46,110 50,400 (0) Beg. Bal. (0) 50,400 End. Bal. 16,910 End. Bal. 50,400 Manufacturing Overhead Selling, General, and Administrative Expenses Beg. Bal. Beg. Bal. (b) 2,190 2,500 (c) (d) (c) 2,100 1,100 5,400 (e) 720 480 (f) 6,000 End. Bal. 4,320 End. Bal. 16,170 Sales Revenue Beg. Bal. 65,520 (0) End. Bal. 65,520 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the amount of over- or underapplied overhead. Manufacturing Overhead Overapplied by Required 1 Required 2 Required 3 Required 4 Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. Adjusted Gross Profit