Memory Construction, Inc. is a home builder in Arizona. Memory uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,050,000 and total direct labor cost of $2,625,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. More info a. Purchased materials on account, $490,000 Requirement 1. Calculate Memory's predetermined overhead allocation rate for the year. b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. Predetermined overhead Estimated overhead cost 1050000 Estimated direct labor cost 2625000 Direct Materials Direct Labor allocation rate 0.40 House 402 $ 55,000 $ 43,000 House 403 64,000 33,000 Requirement 2. Prepare journal entries to record the events in the general journal. (Record debits first, then credits. a. Purchased materials on account, $490,000. House 404 House 405 61,000 54,000 88,000 51,000 Date Accounts a. Raw Materials Inventory Accounts Payable Debit Credit 490000 490000 d. Depreciation of construction equipment, $6,900 c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. Wages are not yet paid. e. Other overhead costs incurred: Equipment rentals paid in cash, $30,000; Worker liability insurance expired, $8,000. f. Allocated overhead to jobs. g. Houses completed: 402, 404 h. House sold on account: 404 for $250,000 b. Requisitioned direct materials and used direct labor in construction. Record the materials requisitioned. Date Accounts b. Work-in-Process Inventory Debit Credit Print Done Requirements 1. Calculate Memory's predetermined overhead allocation rate for the year. 2. Prepare journal entries to record the events in the general journal. 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Memory Construction