Goathead Company uses a job order cost system with overhead applied based on direct labor hours. See estimated amounts below. Note the beginning balances for Finished Goods (Job 101) and Work-in-Process (Jobs 102 & 103) for the costs accumulated to date. Also note, the beginning balances in the other balance sheet accounts.
Estimated Overhead for 2014	720,000
Estimated Direct Labor Hours for 2014	24,000
During January the comapny had the following transactions:
(a)	Purchased raw materials on accout in the amount of:			10,000
(b)	Issued the following materials into production:
		Amount	Explanation
	Direct materials	7,000	Job 102	2,000
			Job 103	5,000
	Indirect materials	2,000	Used on both jobs.
	Total	9,000
(c)	Recorded salaries and wages as follows:
		Amount	Explanation
	Direct labor	10,000	Job 102	6,000
			Job 103	4,000
	Indirect labor	4,000	For factory supervision
	Salaries	5,000	For administrative staff
	Total	19,000
(d)	Applied overhead to jobs based on the number of direct labor hours required
	Job Number	Direct labor hours
	Job 102	300
	Job 103	200
	Total	500
(e)	Recorded the following actual manufacturing costs:
		Amount	Explanation
	Rent	6,000	Paid factory rent in cash
	Depreciation	5,000	Factory equipment
	Insurance	3,000	Had one month of factory insurance policy expire
	Utilities	2,000	Received factory utility bill but did not pay it.
	Total	16,000
(f)	Recorded the following general and administrative costs:
		Amount	Explanation
	Advertising	2,000	Advertising paid in cash
	Depreciation	3,000	Office equipment
	Other expenses	1,000	Miscellaneous expense incurred but not paid.
	Total	6,000
(g)	Sold Job 101, which is recorded in Finished Goods:
	Sales Price	55,000
	Cost	30,000
(h)	Completed Job 102 but did not sell it; Job 103 is still in process at year-end.
Compute the predetermined overhead rate.
Predetermined overhead rate	$30 per hour
Compute how much overhead would be applied to jobs during the period:
Overhead applied	$15,000
Compute the total cost of Jobs 102 and 103 at the end of the period. You will enter your calculation in the 'Ledger Accounts' tab of this workbook.
Where will the cost of each of these jobs appear on the Balance sheet?
The cost of each job will not appear anywher in the balance sheet, rather it will appear in the income statement as cost of goods manufactured.
Post the journal entries to the 'T' Accounts in the 'Ledger Accounts' tab. Calculate the ending balances in all of the accounts.
Calculate the amount of over- or underapplied overhead in the 'Ledger Accounts' tab.
Post the journal entry in the T accounts to dispose of the overhead balance in the 'Ledger Accounts' tab.
Prepare a statement of cost of goods manufactured report in the 'Reports' tab.
Prepare an income statement in the 'Reports' tab.
Prepare a basic balance sheet in the 'Reports' tab.