Kronos Test Systems manufactures automated testing equipment. The company uses a job- order costing system and applies overhead on the basis of machine hours (MH). At the beginning of the year 2022, estimated manufacturing overhead was $150,000, and the estimated machine hours was 7,500. Data regarding all jobs for 2022 at Kronos are presented below. Job Number XJ-107 ST-211 XD-108 SL-205 RX-115 Beginning Balance $218,000 121,450 22,600 40,000 Direct Materials $5,000 2,500 81,450 71,800 15,200 Direct Labour $8,400 12,160 20,960 27,000 20,000 Machine Hours 180 300 3,100 2,020 1,000 Breakdown of Estimated Manufacturing Overhead: Current Machine Maintenance 74,000 Indirect Labor 40,000 Indirect Material 23,000 Utilities, Tax and Insurance 13,000 150,000 Table Estimated Manufacturing Overhead New Machine 60,000 40,000 23,000 13,000 136,000 By the end of 2022, all jobs but RX-115 were completed, and all completed jobs had been delivered to customers except for SL-205. The management of Kronos is considering to replace the machine currently being used to reduce maintenance cost and increase capacity. The new machine will decrease the maintenance cost by 14,000 per year and increase available capacity from 7,500 machine hours to 10,000 machine hours. The estimated manufacturing overhead using the new machine is provided in Table - 1. However, because of the machine configuration, it will take 10% more machine hours to complete the jobs. As the management accountant, you have to provide the management your recommendation. Actual Manufacturing Overhead for 2022 was $138,000. Required: 1. Based on the information provided, what was the balance in Work-in-Process and Finished Goods inventory at the end of 2022? 2. What is the situation of manufacturing overhead of 2022 and how will it be adjusted at year end assuming Kronos uses normal costing system. 3. Prepare a memo for management with your recommendation about the new machine. Should the management replace the old machine or keep the old machine? Provide at least three arguments for your answer. Kronos Test Systems manufactures automated testing equipment. The company uses a job- order costing system and applies overhead on the basis of machine hours (MH). At the beginning of the year 2022, estimated manufacturing overhead was $150,000, and the estimated machine hours was 7,500. Data regarding all jobs for 2022 at Kronos are presented below. Job Number XJ-107 ST-211 XD-108 SL-205 RX-115 Beginning Balance $218,000 121,450 22,600 40,000 Direct Materials $5,000 2,500 81,450 71,800 15,200 Direct Labour $8,400 12,160 20,960 27,000 20,000 Machine Hours 180 300 3,100 2,020 1,000 Breakdown of Estimated Manufacturing Overhead: Current Machine Maintenance 74,000 Indirect Labor 40,000 Indirect Material 23,000 Utilities, Tax and Insurance 13,000 150,000 Table Estimated Manufacturing Overhead New Machine 60,000 40,000 23,000 13,000 136,000 By the end of 2022, all jobs but RX-115 were completed, and all completed jobs had been delivered to customers except for SL-205. The management of Kronos is considering to replace the machine currently being used to reduce maintenance cost and increase capacity. The new machine will decrease the maintenance cost by 14,000 per year and increase available capacity from 7,500 machine hours to 10,000 machine hours. The estimated manufacturing overhead using the new machine is provided in Table - 1. However, because of the machine configuration, it will take 10% more machine hours to complete the jobs. As the management accountant, you have to provide the management your recommendation. Actual Manufacturing Overhead for 2022 was $138,000. Required: 1. Based on the information provided, what was the balance in Work-in-Process and Finished Goods inventory at the end of 2022? 2. What is the situation of manufacturing overhead of 2022 and how will it be adjusted at year end assuming Kronos uses normal costing system. 3. Prepare a memo for management with your recommendation about the new machine. Should the management replace the old machine or keep the old machine? Provide at least three arguments for your