O$$Leary Corporation manufactures special$-$purpose portable structures $($huts$,$ mobile offices, and so on$)$ for use at construction sites. It only builds to order $($each unit is built to customer specifications$).$ O$$Leary uses a normal job costing system. Direct labor at O$$Leary is paid $$35$ per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor$-$hours. The company incurred manufacturing overhead costs during two recent years $($adjusted for price$-$level changes using current prices and wage rates$)$ as follows:

Year $1$ Year $2$

Direct labor$-$hours worked $70,60057,600$

Manufacturing overhead costs incurred:

Indirect labor $ $2,904,000$ $ $2,304,000$

Employee benefits $1,059,000864,000$

Supplies $706,000576,000$

Power $663,000558,000$

Heat and light $145,200145,200$

Supervision $786,690667,050$

Depreciation $2,090,5002,090,500$

Property taxes and insurance $823,610859,250$

Total manufacturing overhead costs $ $9,178,000$ $ $8,064,000$

At the beginning of Year $3,$ O$$Leary has two jobs, which have not yet been delivered to customers. Job MC$-270$ was completed on December $27,$ Year $2.$ It is scheduled to ship on January $7,$ Year $3.$ Job MC$-275$ is still in progress. For the purpose of computing the predetermined overhead rate, O$$Leary uses the previous year$$s actual overhead rate. Data on direct materials costs and direct labor$-$hours for these jobs in Year $2$ follow:

Job MC$-270$ Job MC$-275$

Direct materials costs $ $273,600$ $ $498,600$

Direct labor$-$hours $2,680$ hours $3,380$ hours

During Year $3,$ O$$Leary incurred the following direct materials costs and direct labor$-$hours for all jobs worked in Year $3,$ including the completion of Job MC$-275$:

Direct materials costs $ $11,843,600$

Direct labor$-$hours $77,600$

Actual manufacturing overhead $ $9,984,000$

At the end of Year $3,$ there were four jobs that had not yet shipped. Data on these jobs follow:

MC$-389$ MC$-390$ MC$-397$ MC$-399$

Direct materials $ $46,800$ $ $70,600$ $ $107,100$ $ $32,500$

Direct labor$-$hours $1,776$ hours $2,880$ hours $6,280$ hours $1,480$ hours

Job status Finished Finished In progress In progress

Required:

What were the amounts in the beginning Finished Goods and beginning Work$-$in$-$Process accounts for Year $3?$

O$$Leary incurred direct materials costs of $$60,600$ and used an additional $660$ hours in Year $3$ to complete Job MC$-275.$ What was the final $($total$)$ cost charged to Job MC$-275?$

What was over$-$ or underapplied overhead for Year $3?$

O$$Leary prorates any over$-$ or underapplied overhead to Cost of Goods Sold, Finished Goods Inventory, and Work$-$in$-$Process Inventory. Prepare the journal entry to prorate the over$-$ or underapplied overhead.

A customer has asked O$$Leary to bid on a job to be completed in Year $4.$ O$$Leary estimates that the job will require about $$94,300$ in direct materials and $5,180$ direct labor$-$hours. Because of the economy, O$$Leary expects demand for its services to be low in Year $4,$ and the CEO wants to bid aggressively but does not want to lose any money on the project. O$$Leary estimates that there would be virtually no sales or administrative costs associated with this job. What is the minimum amount O$$Leary can bid on the job and still not incur a loss?