Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold. The company used a budgeted indirect-cost rate for its manufacturing operations. Machine hours are used to allocate fabrication. Direct labor hours were used to allocate assembly. Moira had the following information

Budgeted amount	Fabrication	Assembly
Factory overhead	$500,000	$1,000,000
Machine hours	4,000	20,000
Direct labour cost	125,000	250,000
Direct labour hours	12,500 hours	25,000 hours

Job 500 job cost sheet indicated the following

Budgeted amount	Fabrication	Assembly
Direct materials	$5,000	$10,000
Machine hours	300	300
Direct labour cost	$9,000	$8,000
Direct labour hours	600	400

At the end of the year total factory overhead for fabrication is $660,000 and there was 4,500 machine hours in the fabrication department and 21,000 machine hours in the assembly department.

Ending balances in the relevant accounts were:

Work-in-Process $40,000

Finished Goods 80,000

Cost of Goods Sold 680,000

a. Determine the cost of Job 500.

b. Prepare a journal entry to write off the difference between allocated and actual

overhead directly to Cost of Goods Sold. Be sure your journal entry closes the

related overhead accounts.

c. Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances.