Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $44,000. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Job 27 Highlands Mall Job 33 Pine Ridge Estates Materials and equipment $ 16,575 $ 53,300 Direct labor 14,300 26,650 Overhead (applied) 4,290 7,995 Overhead has been applied at 30 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 34 35 Materials and equipment $ 3,800 $ 5,600 $ 5,400 $ 3,700 Direct labor (wages payable) 5,300 7,550 6,700 2,400 Other May Events Received $13,300 payment on Job 24 delivered to customer in April. Purchased materials and equipment for $10,200 on account. Billed Pine Ridge Estates $138,000 and received payment for $115,000 of that amount. Determined that payroll for indirect labor personnel totaled $730. Issued supplies and incidental materials for current jobs costing $235. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). Property taxes $ 630 Storage area rental 755 Truck and delivery cost 400 Advertising and promotion campaign 680 Inspections 280 Telephone and other miscellaneous 405 Equipment depreciation 530

Required: a. Prepare journal entries to record the flow of costs for operations during May.

b. Calculate the amount of over- or underapplied overhead for the month.

c. Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory.