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 $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 69,400 56,400 Manufacturing overhead costs incurred Indirect labor $ 2,856,000 $ 2,256,000 Employee benefits 1,041,000 846,000 Supplies 694,000 564,000 Power 651,000 546,000 Heat and light 142,800 142,800 Supervision 783,210 663,450 Depreciation 2,054,500 2,054,500 Property taxes and insurance 799,490 823,250 Total manufacturing overhead costs $ 9,022,000 $ 7,896,000

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 $ 272,400 $ 497,400 Direct labor-hours 2,620 hours 3,320 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 $ 11,842,400 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:

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 $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?

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 $93,700 in direct materials and 5,120 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?

I need assistance and verify if I am on the right track