Cost accumulation in two departments Country Products manufactures quilt racks. Pine stock is introduced in Department 1, where the raw material is cut and assembled. In Department 2, completed racks are stained and packaged for shipment. Department 1 applies overhead on the basis of machine hours; Department 2 applies overhead on the basis of direct labor hours. The companys predetermined overhead rates were computed using the following information:

	Department 1	Department 2
Expected overhead	$930,000	$761,200
Expected DLHs	8,000	44,000
Expected MHs	60,000	5,000

Sue Power contacted Country Products to produce 1,000 quilt racks as a special order. Power wanted the racks made from teak and to be made larger than the companys normal racks. Country Products designated Powers order as Job #462. During July, Country Products purchased $692,000 of raw material on account, of which $38,000 was teak. Requistions were issued for $680,000 of raw material, including all the teak. There were 570 direct labor hours worked (at a rate of $11 per DLH) and 4,800 machine hours recorded in Department 1; of these hours, 50 DLHs and 640 MHs were on Job#462. Department 2 had 2,860 DLHs (at a rate of $18 per DLH) and 360 MHs; of these, 316 DLHs and 40 MHs were worked on Job #462. Assume that all wages are paid in cash. Job #462 was completed on July 28 and shipped to Power. She was billed cost plus 20 percent. a. What are the predetermined overhead rates for Departments 1 and 2?

	Predetermined Overhead Rate
Department 1		per MH
Department 2		per DLH

b. Prepare journal entries for the July transactions. Note: Round amounts to the nearest whole dollar. Note: List any multiple debits or any multiple credits in alphabetical order by account name.

	Account	Debit	Credit
1	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record raw materials purchased on account
2	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record the direct materials issued
3	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record the labor costs in Department 1
4	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record overhead applied in Department 1
5	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record the labor costs in Department 2
6	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record overhead applied in Department 2
7	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record the completion of Job #462
8	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record sales
9	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryJob 462Overhead ControlRaw Material InventorySalesWork in Process InventoryJob 462Work in Process Inventoryother jobs
	To record the cost of sales

c. What were the cost and selling price per unit of Job #462? What was the cost per unit of the raw material? Note: Round your answers to two decimal places.

Cost per unit
Selling price per unit
Cost per unit of raw material

d. Assume that enough pine had been issued in July for 40,000 quilt racks. The raw material inventory manager is Powers friend, who conveniently forgot to trace the teaks cost specifically to Job #462. What would the effect of this error be on the raw material cost, total cost, and selling price for each unit in Job #462? Note: Round your answers to two decimal places.

Revised raw material cost per unit
Revised total cost per unit
Revised selling price per unit