Hill Construction Company uses a job-order costing system. The company had three jobs in process at the beginning of the month. The beginning balance in the Work in Process control account was $145,400, made up of $42,400, $65,100, and $37,900 shown on the job cost sheets for Jobs 302, 303, and 304, respectively. During the month, Hill added the following materials and labor costs to each job:

Inventory

Materials

Labor

Job 302

$10,200

$32,000

Job 303

12,400

18,000

Job 304

16,500

10,000

Total

$39,100

$60,000

Overhead cost is applied at the predetermined rate of $0.60 per direct labor dollar. Actual overhead costs for the month were $36,800. Hill completed Job 303 and sold it for $129,000 cash during the month.

Required

Determine the balance in the Work in Process account at the end of the month.

Explain how the entry to close the Manufacturing Overhead account would affect the Cost of Goods Sold account.

Determine the amount of gross margin Hill would report on its income statement for the month.