Deglman Manufacturing uses a job order cost system and applies overhead to production

on the basis of direct labor costs. On January 1 2012 Job No. 50 was the only job in process

The costs incurred prior to Januray 1 on this job were as follows: Direct Materials was $ 20,000

diect labor was $12,000 and the manufacturing overhead was $ 16,000. As of January 1 Job No 49

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 Deglman Manufacturing began production on Jobs No. 51 and 52

and completed Jobs 50 and 51. Jobs 49 and 50 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 on $90,000 on account

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

3. Incurred manaufactuirng overhead costs as follows: indirect materials, $17,000 indirect labor $20,000.

depreciation expense on equipment $ 19,000 and various other costs of on accoutn of $16,000

4. Assigned diect materials and direct labor to jobs as follows

Job Number Direct Materials Direct Labor

50	10,000	5,000
51	39,000	25,000
52	30,000	20,000

Requirements

1. Calculate the predetermined overhead rate for 2012, assuming Deglman Manufactuirng

estimates total manufactuirng overhead costs of $980,000 direct labor costs of $700,000 and

diect labor hours on 20,000 for the year

2. Prepare the journal entries to record the purchases of raw materilas, factory labor costs incurred

and the manufacturing overhead costs incurred during the month of January

3. Prepare the journal entried to record the assignment of direct materials, direct labor and manufacturing

overhead costs to production.

4. Prepare the journal entries to record the sale of any jobs during the month of January

5. Calculate the balance in the Finished Goods Inventory at the end of the month

6. Is overhead under or over applied and by how much.