Garnett Printing Corp. uses a job-order cost system. They recently opened up a brand new plant and just started production on January 1, 2020. The following data summarize the operations related to the first quarter's production:

1. Materials purchased on account were $192,000, and factory wages incurred were $91,500.

2. Materials requisitioned and factory labour used by job were as follows:

Job Number	Materials	Factory Labour
A20	$ 33,240	$18,000
A21	42,920	24,000
A22	36,100	17,000
A23	41,270	25,000
General factory use	4,470	7,500
	$158,000	$91,500

3. Manufacturing overhead costs incurred on account were $59,500.

4. Depreciation on machinery and equipment was $14,550.

5. The manufacturing overhead rate is based on direct labour cost. Another similar plant had estimated annual manufacturing overhead costs of $576,000 with direct labour costs of $720,000.

6. Jobs completed during the quarter were A20, A21, and A23.

7. Job A23 was sold to the customer for $150,000 cash in the quarter.

Instructions

1) Calculate the predetermined overhead rate.

2) Prepare a schedule showing the individual cost elements and total cost for each finished job along with the incomplete job.

3) Prepare entries to record the operations summarized above.

4) Prepare a Cost of Good Manufactured Schedule for the quarter.

5) Determine the over/under applied overhead for COGS method and calculate the gross profit. What would the gross profit be if we prorated?

Please explain your steps so I can get a better understanding as well!