OLeary 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). OLeary uses a normal job costing system. Direct labor at OLeary is paid $33 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		70,200			57,200
Manufacturing overhead costs incurred
Indirect labor	$	2,888,000		$	2,288,000
Employee benefits		1,053,000			858,000
Supplies		702,000			572,000
Power		659,000			554,000
Heat and light		144,400			144,400
Supervision		785,530			665,850
Depreciation		2,078,500			2,078,500
Property taxes and insurance		815,570			847,250
Total manufacturing overhead costs	$	9,126,000		$	8,008,000

At the beginning of year 3, OLeary 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, OLeary uses the previous years actual overhead rate. Data on direct material costs and direct labor-hours for these jobs in year 2 follow.

	Job MC-270			Job MC-275
Direct material costs	$	273,200		$	498,200
Direct labor-hours		2,660	hours		3,360	hours

During year 3, OLeary incurred the following direct material costs and direct labor-hours for all jobs worked in year 3, including the completion of Job MC-275.

Direct material costs	$	11,843,200
Direct labor-hours		77,200
Actual manufacturing overhead	$	9,888,000

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	$46,400			$70,200			$106,700			$32,100
Direct labor-hours	1,772 hours			2,860 hours			6,260 hours			1,460 hours
Job status	Finished			Finished			In progress			In progress

Required:

a. What was the amount in the beginning Finished Goods and beginning Work-in-Process accounts for year 3?

b. OLeary incurred direct materials costs of $60,200 and used an additional 620 hours in year 3 to complete job MC-275. What was the final (total) cost charged to job MC-275?

c. What was over- or underapplied overhead for year 3?

d. OLeary 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.

e. A customer has asked OLeary to bid on a job to be completed in year 4. OLeary estimates that the job will require about $94,100 in direct materials and 5,160 direct labor-hours. Because of the economy, OLeary 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. OLeary estimates that there would be virtually no sales or administrative costs associated with this job. What is the minimum amount OLeary can bid on the job and still not incur a loss?

Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E What was the amount in the beginning Finished Goods and beginning Work-in-Process accounts for year 3? Work-in-process inventory Finished goods inventory (Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E O'Leary incurred direct materials costs of $60,200 and used an additional 620 hours in year 3 to complete job MC-275. What was the final (total) cost charged to job MC-275? Final (total) cost charged Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E What was over- or underapplied overhead for year 3? overhead Required A Required B Required C Required D Required E O'Leary prorates any over- or underapplied overhead to Cost of Goods Sold, Finished Goods Inventory, and Work-in-Pro Prepare the journal entry to prorate the Over- or Underapplied Overhead. (If no entry is required for a transaction/eve journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry to prorate any over- or underapplied overhead. Note: Enter debits before credits. General Journal Debit Credit Transaction 1 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Required E 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 $94,100 in direct materials and 5,160 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? Show less Minimum amount