e) - Microsoft Word Mailings Review Table Tools Design Layout View IN 7.A. E = 211 . l AaBb Emphasis Heading 1 c 1 Normal Strong Subtitle = E. Paragraph Styles Gold Nest Company uses job order costing system in which overheadis applied to jobs on the basis of direct labor cost. Estimatedtotal direct labor cost for the year would be $200,000 andtotal manufacturing overhead cost would be $330,000. Inventory balance at the beginning of the year were Raw materials at $25,000, work in process at $10,000 and finished goods at $40,000. During the year, the following transactions were completed a. Rawmaterials purchased for cash, $275,000 b. Raw materials requisitioned for use in production, $280,000. Materials charged directly to jobs, $220,000, the remaining materials were indirect. c. Cost of employee services were direct labor, $180,000; indirect labor, $72,000; sales commissions, $63,000, and administrative salaries, $90,000. d. Rent for the year was $18,000 of which $13,000 is related to factory operations and the rest to selling and administrative activities. e. Factory utility costs incurred. $57,000. Advertising costs, $140,000 f. Depreciation recorded on equipment, $100,000, out of which $88,000 was for factory equipment and the remaining was on equipment used in selling and administrative activities. & Based on the job order cost sheets, goods manufactured and completed during the year cost $675,000 h. Sales for the year, $1,250,000. Cost to manufacture these goods according to their job cost sheets was $700,000. Required: 1. Compute the total manufacturing overhead (MOH) applied to jobs for the year. Is the MOH under-applied or over-applied? Close the balance to cost of goods sold and prepare statement of cost of goods manufactured and income statement for the year. Problem #1 S S XSE S 5 Manufacturing overhead applied per unit S MOH applied for the year S Actual Manufacturing overhead Indirect Materials Indirect Labor Rent Expense - Factory Utility Expense - Factory Depreciation - Factory equipment Total Over-applied MOH S E S S Gold Nest Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 20xx Gold Nest Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 20xx Raw Materials used Direct Labor Manufacturing Overhead applied Total Manufacturing costs Add: Work in Process, Jan. 1 Total cost of goods in process Less: Work in Process, Dec. 31 Cost of Goods Manufactured Gold Nest Company Income Statement For the Year Ended December 31, 20xx Sales Less cost of goods sold ($ -S Gross margin.. Less selling and administrative expenses: Advertising expense Administrative salaries.. Sales commissions.. Rent expense.... Depreciation expense. Net operating income