Individual Assignment 1 Question 1 Brinkerhoff, Inc., designs and fabricates display units for use at conventions. The beginning and ending inventory account balances were as follows: Raw materials Work in process Finished goods Beginning Ending $38,000 27,000 30,000 73,900 45,000 76,000 Because each display unit is a unique design and may require anything from a few hours to a month or more to complete, Brinkerhoff, Inc. uses a job-order costing system. Overhead in the fabrication shop is charged to display units on the basis of direct labor cost. The company's predetermined overhead rate for the year is based on a cost formula that estimated $99,000 in manufacturing overhead for an estimated allocation base of $110,000 direct labor dollars. The following transactions were recorded during the year: a. Raw materials, such as wood, paints, and metal sheeting, were purchased on account, $82,000. b. $5,600 of raw materials were issued to production was for indirect materials. c. Payroll costs incurred and paid: direct labor, $125,000; indirect labor, $49,500; and selling and administrative salaries, $71,000. d. Fabrication shop utilities costs incurred, $14,000. e. Depreciation recorded for the year, $23,000 ($4,200 on selling and administrative assets; $18,800 on fabrication shop assets). f. Prepaid insurance expired, $4,600 ($3,400 related to fabrication shop operations, and $1,200 related to selling and administrative activities). g. Shipping expenses incurred, $41,000. h. Other manufacturing overhead costs incurred, $17,800. i. Manufacturing overhead was applied to production. Overhead is applied on the basis of direct labor cost. Required: 1. Compute the predetermined overhead rate. 2. Compute the amount of manufacturing overhead underapplied or overapplied. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. 3. Prepare a schedule of cost of goods manufactured and a schedule of cost of goods sold.