Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $121,800 of manufacturing overhead for an estimated allocation base of $87,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

Purchase of raw materials	$	134,000
Direct labor cost	$	83,000
Manufacturing overhead costs:
Indirect labor	$	119,900
Property taxes	$	8,600
Depreciation of equipment	$	17,000
Maintenance	$	13,000
Insurance	$	7,600
Rent, building	$	39,000

	Beginning		Ending
Raw Materials	$	22,000	$	13,000
Work in Process	$	44,000	$	36,000
Finished Goods	$	68,000	$	58,000

Required:
1-a.	Compute the predetermined overhead rate for the year.

1-b.	Compute the amount of underapplied or overapplied overhead for the year.

2.	Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

3-a.	Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)

3-b.	Identify the options available for disposing of underapplied or overapplied overhead? (Select all that apply.)

4.	Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $3,600 in direct materials and $4,600 in direct labor cost and the company priced its jobs at 55% above the jobs cost according to the accounting system?

5.	Direct materials made up $8,800 of the $36,000 ending Work in Process inventory balance. Supply the information missing below: