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$$Leary is paid $$29$ 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 $69,40056,400$

Manufacturing overhead costs incurred:

Indirect labor $ $2,856,000$ $ $2,256,000$

Employee benefits $1,041,000846,000$

Supplies $694,000564,000$

Power $651,000546,000$

Heat and light $142,800142,800$

Supervision $783,210663,450$

Depreciation $2,054,5002,054,500$

Property taxes and insurance $799,490823,250$

Total manufacturing overhead costs $ $9,022,000$ $ $7,896,000$

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 $ $272,400$ $ $497,400$

Direct labor$-$hours $2,620$ hours $3,320$ 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 $ $11,842,400$

Direct labor$-$hours $76,400$

Actual manufacturing overhead $ $9,696,000$

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 $ $45,600$ $ $69,400$ $ $105,900$ $ $31,300$

Direct labor$-$hours $1,764$ hours $2,820$ hours $6,220$ hours $1,420$ 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$$Leary incurred direct materials costs of $$59,400$ and used an additional $540$ 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 $$93,700$ in direct materials and $5,120$ direct labor$-$hours. Because of the economy, O$$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?