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 $27 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 2 56,000 Year 1 Direct labor-hours worked 69,000 Manufacturing overhead costs incurred Indirect labor $ 2,840,000 Employee benefits 1,035,000 Supplies 690,000 Power 647,000 Heat and light 142,000 Supervision 782,050 Depreciation 2,042,500 Property taxes and insurance 791,450 Total manufacturing overhead costs $8,970,000 $2,240,000 840,000 560,000 542,000 142,000 662,250 2,042,500 811,250 $7,840,000 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 material costs and direct labor- hours for these jobs in year 2 follow. Direct material costs Direct labor-hours Job MC-270 $272,000 2,600 hours Job MC-275 $497,000 3,300 hours During year 3, O'Leary 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 $11,842,000 Direct labor-hours 76,000 Actual manufacturing overhead $ 9,600,000 At the end of year 3, there were four jobs that had not yet shipped. Data on these jobs follow. Direct materials Direct labor-hours Job status MC-389 $45,200 1,760 hours Finished MC-390 $69,000 2,800 hours Finished MC-397 $105,500 6,200 hours In progress MC-399 $30,900 1,400 hours In progress Required: a. What was the amount in the beginning Finished Goods and beginning Work-in-Process accounts for year 3? b. O'Leary incurred direct materials costs of $59,000 and used an additional 500 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. 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. 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 $93,500 in direct materials and 5,100 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