Divine Homes manufactures prefabricated chalets in Colorado. The company uses a perpetual inventory system and a job cost-ing system in which each chalet is a job.

The following events occurred during

May:

a. Purchased materials on account,

$480.000.

b. Incurred total manufacturing

wages of $116,000, which in-

cluded both direct labour and

indirect labour. Used direct

labour in manufacturing as

follows:

Direct

Labour

Chalet 13

$14.300

Chalet 14

28,700

Chalet 15

19,100

Chalet 16

21.500

c. Requisitioned direct materials in

manufacturing as follows:

Direct

Materi-als

Chalet 13

$41,900

Chalet 14

56.900

Chalet 15

62,400

Chalet 16

66.800

d. Depreciation of manufacturing

equipment used on different

chalets, $6,700.

e. Other overhead costs incurred

on Chalets 13-16:

Equipment

rentals paid in

cash

$10,800

Prepaid plant

insurance ex-

pired

3,000

F- Allocated overhead to jobs at the predetermined rate of 60%

of direct labour cost.

G- Chalets completed: 13, 15, and

16.

H- Chalets sold on account: #13 for

$97,000; #16 for $149,000.

Requirements

1. Record the events in the general

journal.

2. Post the appropriate entries to

the T-accounts, identifying each

entry by letter. Determine the

ending account balances, assum-

ing that the beginning balances

were zero.

3. Add the costs of the unfinished

chalet, and show that this total

amount equals the ending bal-

ance in the work in process in-

ventory account.

4- Summarize the job cost of the

5- Compute gross profit on each

chalet that was sold. What costs

must gross profit cover for Di-

vine Homes?