P4.32 Predetermined overhead rate; journal entries LO 4.49.4.62 Advanced Marine Technologies Ltd (AMT) manufactures outboard motors and an assortment of other marine equipment. The company uses a job costing system and manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $2 868 000, and management expect that 75 000 machine hours will be used. The following events occurred in April: (a) The firm purchased marine propellers from Headland Marine Corporation for $8 850 on credit. (b) (e) A requisition was filed by the gauge department supervisor for 500 kilograms of clear plastic. The material was originally purchased for $0.55 per kilogram. The motor testing department supervisor requisitioned 200 metres of electrical wire, which is considered an indirect material. The wire was purchased for $0.20 per metre. The month's electricity bill of $1 000 was paid in cash. Direct labour costs incurred in April were $145 000. Page 174 April's insurance cost was $2 500, for insurance on the cars driven by sales personnel. The policy had been prepaid in March. Metal tubing costing $6 000 was purchased on credit. A cash payment of $1 700 was made on outstanding accounts payable. Indirect labour costs of $26 000 were incurred during April. Depreciation on equipment for April amounted to $22 000. (f) (9) (h) (i) (1) (k) Job number 045, consisting of 50 tachometers, was finished during April. The total cost of the job was $2 200. (1) During April, 8 000 machine hours were used. (m) Sales on credit for April amounted to $350 000. The cost of goods sold in April was $139 000. Required: 1. Calculate the company's predetermined overhead rate for the year. 2. Prepare journal entries to record the events listed above