Deep in the woods, Orchestrated for You (OY) has a small workshop where they build stringed instruments for sale to budding musicians. OYs accountant has long used a normal costing system and applied manufacturing overhead on the basis of direct labor hours. The companys budget for the current year includes the following predictions:

Budgeted total manufacturing overhead $5,000,000

Budgeted total direct-labor hours $400,000

During November, the company worked to complete the following two orders (production jobs):

Job No. 334: consisting of 76 violins Job No. 232: consisting of 110 cellos

The events of November are described as follows:

1. One thousand square feet of Maplewood was purchased on account for $6,600.
2. Four hundred pounds of wire (used to manufacture strings) was purchased on account for $6,800.
3. The following requisitions were submitted to the inventory warehouse on November 6th:
   1. Requisition 808: 480 square feet of Maplewood at $7 per square foot to be used for violins.
   2. Requisition 12: 1,500 pounds of wire at $6 per pound to be used for cellos.
   3. Requisition 324: 25 gallons of clear coat instrument wax at $10 per gallon.
4. An analysis of labor time cards revealed the following labor usage for November:
   1. Direct labor: Violins, 1,700 hours at $60 per hour
   2. Direct labor: Cellos, 1,750 hours at $40 per hour
   3. General factory cleanup totaling $4,900
   4. Factory supervisory salaries totaling $14,000
5. Depreciation of the factory building and equipment during November amounted to $11,500
6. Rent paid in cash for factory equipment used during November was $1,650
7. Heat and light costs on the factory incurred during November amounted to $2,800. The invoices for these costs were received, but the bills were not paid in November.
8. November property taxes on the factory were paid in cash, totaling $1,900.
9. The insurance cost covering factory operations for the month of November was $3,800. The insurance policy had been prepaid.
10. The cost of salaries and fringe benefits for sales and administrative personnel paid in cash during November amounted to $9,000.
11. Depreciation on sales office equipment and space amounted to $5,900.
12. l. Other selling and administrative expenses paid in cash during November amounted to $1,300.
13. Job 232 was completed on November 20.
14. Sixty percent of finished goods from job 232 was sold on account during November for $3,000 each.
15. Double-check that all overhead has been applied for the period
16. Close the overhead account at the end of the period.
17. Orchestrated for You is carrying forward a loss from prior years and therefore has an effective tax rate of 24%

The November 1 balances in selected accounts are as follows:

Cash ...................................... $35,000

AR: Accounts Receivable...... ....... $32,000

Prepaid Insurance....................... $6,000

Raw-Material Inventory............... $120,000

Manufacturing Supplies Inventory... $600

WIP: Work-in-Process Inventory.... $56,000

FG: Finished Goods Inventory ...... $180,000

Accumulated Depreciation on PPE... $80,000

AP: Accounts Payable ................. $16,500

Wages Payable ......................... $98,500

Required:

Record your answers on the cover page and turn in all your work related to the calculation of those numbers. Support for calculations is a requirement for full credit. To complete the assignment:

1. Prepare journal entries to record the events of November.
2. At minimum, complete the t-accounts on the cover page. You may find it useful to complete all the t-accounts related to the problem, see optional sheet. Note: in the process of (1) and (2) you will need to

• calculate the predetermined OH rate
• apply OH

3. Calculate the over-applied or under-applied overhead for November.
4. Record the journal entry to close the overhead account for November.
5. Build an income statement