Kims Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of raw materials is on hand at all times so that work can start as quickly as possible. On May 1, the Raw Materials inventory account had a balance of $24,000. As of May 1, the Work In Process (WIP) inventory account had two jobs not yet complete with the following costs:

	Job 27 Highlands Mall	Job 33 Pine Ridge Estates
Direct Materials	$10,250	$35,000
Direct Labor	9,000	17,500
MOH (allocated)	2,700	5,250

Overhead is allocated at the rate of 30% of direct labor costs. MOH is allocated at the end of the month for incomplete jobs, and again when a job is completed.

May Events:

1. During May, Kims Asphalt started two new jobs. Additional work was done on Jobs 27 and 33. Details on the costs incurred on jobs during May follow:

	Job 27 Highlands Mall	Job 33 Pine Ridge Estates	Job 34 Studio C Cinema	Job 35 Jones Residence
Direct Materials	$2,000	$3,200	$4,600	$2,000
Direct Labor (paid in cash)	3,000	4,500	5,900	1,600

2. Received $12,500 payment on Job 24 delivered to customer in April.
3. Purchased raw materials for $9,400 on account.
4. Job 33 was completed and MOH was allocated.
5. Billed Pine Ridge Estates in the amount of $87,500 for the completion of Job 33; received payment for $50,000 of that amount. The cost of Job 33 is charged to Cost of Installations Completed and Sold (CICS) account. (Record revenues and costs in separate journal entries.)
6. Determined that payroll for indirect labor personnel totaled $650. Checks for payroll distributed to employees.
7. Used $155 of supplies and incidental materials from raw materials inventory for various jobs throughout the month.
8. Recorded other costs for the production operation as follows (all cash except equipment depreciation):

Property taxes	$550
Storage area rental	675
Truck and supplies delivery cost	320
Inspections	200
Utilities	325
Equipment depreciation (repair equipment)	450

9. Paid $600 cash for advertising and promotion campaign.
10. Allocated overhead for incomplete jobs remaining in WIP at the end of the month.

Required:

1. Prepare journal entries to record the flow of costs for operations during May as reflected in 1-10 above. Use only control accounts (Ignore subsidiary accounts). Group transactions into one journal entry where feasible (e.g., record all uses of direct DM in one journal entry).
2. Compute the amount of under- or over-applied MOH for the month of May.
3. Determine the ending balances of all inventory accounts (prior to MOH closing entry in question 4 below).
4. Prepare the journal entry to close out the MOH account assuming under- or overallocated overhead is:
   1. charged to CICS
   2. prorated based on the ending balances of the relevant accounts