Mastery Problem: Job Order Costing Purl of Great Price Company Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces highend knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one ofce managerfknitting supervisor (this employee works 20 hours per week as ofce manager, and 20 hours per week as knitting supervisor}. All wages are paid in cash at the end of each month. Each knitter has a knitting machine that is used about 2.:'3 of the knitter's time, the rest of the knitter's time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the ofce managerfknitting supervisor approximately 5 hours per week. The knitting machines were purchased on January 1 of the current year, and cost $2,400 eachr with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value. ) Nov. 30 Trial Balance PDGP Company Trial Balance November 30, 20Y8 Account Title Debit Credit Cash 20,000 Accounts Receivable 1,000 Supplies 200 Materials 5,000 Work in Process 5,404 Equipment 12,000 Accumulated DepreciationiEquipment 825 Accounts Payable 150 Common Stock 10,000 Retained Earnings 12,000 Dividends 18,096 Sales 307,500 Cost of Goods Sold 255,040 Factory Overhead 15 Wages Expense 13,750 330,490 330,490 ) Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200 Estimated total Office Manageernitting Supervisor wages $42,000 Estimated office utilities $3,000 Estimated factory utilities $4,800 Estimated factory rent $12,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 Compute the predetermined factory overhead rate for the current year. Feedback Check My Work Review the definitions of items that are included in factory overhead for the computation of estimated total factory overhead costs. Materials Requisition Date: Dec. 10 Req. No. 12255 Job No. 83 Description Qty. Issued Unit Price Amount Yarn type B 600 skeins $5 $3,000 Total issued $3,000 Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 65 $15 $975Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 65 $15 $975 12/16-12/31 83 103 15 1,545 Total Cost $2,520 Time Ticket No. 2274 Name: Josh Porter Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 75 $15 $1,125 12/16-12/31 83 88 15 1,320 Total Cost $2,445 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 60 $15 $900 12/16-12/31 83 109 15 1,635 Total Cost $2,535On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an amount box does not require an entry, leave it blank. Dec. 31 Cost of Goods Sold Factory Overhead Feedback Check My Work Partially correct Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter "0". Materials Work in Process 9,840 Finished Goods Factory Overhead 0 Cost of Goods Sold Feedback Check My Work Create T accounts and post the beginning balances from the Nov. 30 Trial Balance panel. Then post your journal entries to get the Dec. 31 account balances.On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 16 through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process Factory Overhead Feedback Check My Work Partially correct On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash. a. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $1,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 Factory Overhead X Wages Expense X X 10000 Wages Payable Cash OC Accumulated Depreciation-Equipment