Mooresville Corporation manufactures reproductions of eighteenth$-$century, classical$-$style furniture. It uses a job costing system that applies factory overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $$1,342,500,$ and management budgeted $89,500$ direct labor hours. Mooresville had no Materials, Work$-$in$-$Process, or Finished Goods Inventory at the beginning of August. These transactions were recorded during August:

Purchased $5,500$ square feet of oak on account at $$26$ per square foot.

Purchased $100$ gallons of glue on account at $$36$ per gallon $($indirect material$).$

Requisitioned $3,850$ square feet of oak and $36$ gallons of glue for production.

Incurred and paid payroll costs of $$198,400.$ Of this amount, $$51,000$ were indirect labor costs; direct labor personnel earned $$22$ per hour.

Paid factory utility bill, $$16,080$ in cash.

August$$s insurance cost for the manufacturing property and equipment was $$3,750.$ The premium had been paid in March.

Incurred $$8,825$ depreciation on manufacturing equipment for August.

Recorded $$2,525$ depreciation on an administrative asset.

Paid advertising expenses in cash, $$5,725.$

Incurred and paid other factory overhead costs, $$14,000.$

Incurred miscellaneous selling and administrative expenses, $$13,625.$

Applied factory overhead to production on the basis of direct labor hours.

Produced completed goods costing $$148,500$ during the month.

Sales on account in August were $$138,000.$ The Cost of Goods Sold was $$114,500.$

Required:

$1.$ Compute the firm$$s predetermined factory overhead rate for the year.

$2.$ Prepare journal entries to record the August events.

$3.$ Calculate the amount of overapplied or underapplied overhead to be closed to the Cost of Goods Sold account on August $31.$

$4.$ Prepare a schedule of Cost of Goods Manufactured and Cost of Goods Sold.

$5.$ Compute the amount of overapplied or underapplied overhead that should be prorated to Work$-$in$-$Process, Finished Goods and Cost of Goods Sold.

$6.$ Using the results from requirements $4$ and $5,$ prepare the income statement for August.