Lauzon Mfg.'s July 31 inventory of raw materials is $160,000. Raw materials purchases in August are $420,000, and factory payroll cost in August is $235.000. Overhead costs incurred in August are: indirect materials, $40,000; indirect labor, $12,000; factory rent, $15,000; factory utilities, $14,000; and factory equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. Job 114 is sold for $402,000 cash in August. Costs for the three jobs worked on in August follow. lob 114 Job 115 lob 116 Balances on July 31: Direct materials $12,000 $20,000 Direct labor 16,000 16,000 Applied overhead 8,000 8,000 Costs during August Direct materials 110,000 Direct labor 32,000 175,000 64,000 $ 70,000 122,000 Applied overhead. Status on August 31 Answers Required: Finished (sold) Finished (unsold) In process 1. Determine the total of each production cost incurred for August (direct labor, direct materials, and applied overhead) and the total cost assigned to each job (including the balances from August 31) using the format above. 2. Prepare journal entries for the month of August to record the following a. Materials purchases (on credit). b. Direct materials used in production. c. Direct labor paid and assigned to Work in Process Inventory. d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) g. Transfer of Jobs 114 and 115 to Finished Goods Inventory. h. Cost of goods sold for Job 114. i. Revenue from the sale of Job 114. j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) [Use complete account titles; do not abbreviate.] Answers Required (cont): 3. Prepare a schedule of cost of goods manufactured. 4. Compute gross profit for August. Show how to present the inventories on the August 31 balance sheet. 5. The over- or underapplied overhead is closed to Cost of Goods Sold. Discuss how this adjustment impacts business decision making regarding individual jobs or batches of jobs.