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 the current year follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $ 16,700 5,900 20,600 The following transactions occurred during January: a. Purchased materials on account for $27,800. b. Issued materials to production totaling $20,500, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. c. Payroll costs totaling $17,300 were recorded as follows: $10,500 for assembly workers $2,500 for factory supervision $1,800 for administrative personnel $2,500 for sales commissions d. Recorded depreciation: $5,100 for factory machines, $1,000 for the copier used in the administrative office. e. Recorded $1,700 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. f. Paid $5,000 in other factory costs in cash. g. Applied manufacturing overhead at a rate of 200 percent of direct labor cost. h. Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,400 for direct materials, $2,400 for direct labor, and $4,800 for applied overhead. i. Sold jobs costing $50,300. The revenue earned on these jobs was $65,390. 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. Required 1 Required 2 Required 3 Required 4 Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: Note: Post all amounts separately. Do not combine/add any dollar amounts when posting to the T-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. Raw Materials Inventory Work in Process Inventory Debit Credit Debit Credit Beginning Balance 16,700 Beginning Balance 5,900 Ending Balance 16,700 Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Beginning Balance Finished Goods Inventory 20,600 20,600 Manufacturing Overhead Ending Balance 5,900 Cost of Goods Sold Credit Debit Credit Beginning Balance Ending Balance Credit Selling, General, and Administrative Expenses Debit Credit Beginning Balance Sales Revenue Debit Credit Ending Balance 0 Ending Balance 0 < Required 1 Required 2 > Show less Required 1 Required 2 Required 3 Required 4 Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. Unadjusted Gross Profit < Required 1 Required 3 > Required 1 Required 2 Required 3 Required 4 Determine the amount of over- or underapplied overhead. Manufacturing Overhead < Required 2 Required 4 > Complete this question by entering your answers in the tabs below. 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 < Required 3 Required 4 >