Johnson Manufacturing company, a manufacturer of custom-made drones, uses a job order cost system to accumulate costs in its manufacturing plant. The company allocates manufacturing overhead on the basis of direct labor hours. The business expects to incur $ 3,500,000 of manufacturing costs during the year and to use 2,000,000 direct labour hours.  The company’s inventory balances on April 1, 2022 ( the start of its fiscal year),  were as follows:

Raw Materials	$ 32,000
Work in process	20,000
Finished Goods	48,000

During the year, the following transactions were completed:

1. Raw materials were purchased on account, $ 170,000.
2. Raw materials were issued from the storeroom for use in production, $ 180,000 ( 80 percent direct and 20 percent indirect).
3. Employee salaries and wages were accrued as follows: direct labour, $ 200,000; indirect labour, $ 82,000; and selling and administrative salaries, $ 90,000.
4. Utility costs were incurred in the factory, $ 65,000.
5. Advertising costs were incurred $ 100,000.
6. Prepaid insurance expired during the year, $ 20,000 ( 90 percent related to factory operations, and 10 percent to selling and administration activities).
7. Depreciation was recorded, $ 180,000 ( 85 percent related to factory assets, and 15 percent related to selling and administrative assets.
8. The overhead cost was applied to production at the predetermined overhead rate calculated in Part 1
9. Goods costing $ 700,000 to complete were transferred to the finished goods warehouse.
10. Sales for the year (all on account) totaled $ 1,000,000. These goods had cost $ 720,000 to manufacture.

1. Prepare T-accounts for Raw Materials, Work in process, Finished Goods, Manufacturing Overhead, and Cost of Goods Sold. Post the appropriate parts of your journal entries to these T-accounts.  Compute the ending balance in each account. ( Do not forget  to enter the opening balances in the inventory accounts)

1. 2. Is manufacturing over-applied or under-applied for the year? Prepare a journal entry to close this balance to Cost of Goods Sold. 
2. 3. Job 42 was one of the many jobs started and completed during the year. The job required $8,000 in direct materials and 39 hours of direct labor time at a total direct labor cost of $9,200. The job contained four units. If the company bills at a price 60% above the unit cost on the job cost sheet, calculate the selling price per unit charged to the customer.