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Part 1 Problem 1 Job Order Costing (50 points) Abeling Industries uses a job-order costing system and a predetermined overhead rate based on direct labor cost. Estimated manufacturing overhead for the coming year was $600,000 and estimated direct labor hours were 40,000. On January 1, the company had the following inventories Raw materials inventory $0 Work in process (Job No. 125) $12,000 Finished goods inventory $0 The following information pertains to the company's activities for the month of January: 1. Purchased $180,000 of materials on account. 2. Jobs 126 and 127 were started during the month. 3. Materials requisitioned for production totaled $90,000, of which $5,000 was for indirect materials. The remainder was distributed as follows: Job No. 125 $32,000 Job No. 126 27,000 Job No. 127 26,000 4. Factory payroll for the month totaled $140,000, of which $23,000 was for indirect labor. The company uses a labor rate of $13 per direct labor hour. The direct labor was distributed as follows: Job No. 125 $65,000 Job No. 126 39,000 Job. No. 127 13,000 5. The company made adjusting entries at the end of January to record the following expenses: Depreciation $45,000 Expired insurance 7,000 6. Other manufacturing cots not yet paid totaled $50,000. 7. Manufacturing overhead was applied using the predetermined overhead rate based upon direct labor hours. 8. Job Nos. 125 and 126 were completed during the month. 9. Job No. 125 was sold during the month at a selling price of 170 percent of manufacturing cost. Required: a. Prepare journal entries to record the manufacturing activities of the company for January. b. Prepare the journal entries to dispose of underapplied or overapplied overhead if the underapplied or overapplied overhead is treated as an adjustment to cost of goods sold