PA2-5 (Algo) Recording Manufacturing Costs and Analyzing Manufacturing Overhead [LO 2-3, 2-4, 2-5] Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $16,400 6,488 22,eee The following transactions occurred during January (a) Purchased materials on account for $27,800. (b) Issued materials to production totaling $21,200, 90 percent of which was traced to specific jobs and the remainder of which wa treated as Indirect materials. (c) Payroll costs totaling $17,900 were recorded as follows: $11,800 for assembly workers 1,800 for factory supervision 2,400 for administrative personnel 1,900 for sales commissions (d) Recorded depreciation: $5,700 for factory machines, $1,000 for the copler used in the administrative office. (e) Recorded $1,100 of expired Insurance. Forty percent was Insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Pald $5,800 in other factory costs In cash. (9) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. (n) Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,200 for direct materials, $2,300 for direct labor, and $4,600 for applied overhead. (0) Sold jobs costing $50,400. The revenue earned on these jobs was $65,520. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work In Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling, General, and Administrative Expenses. g. Sales Revenue. 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. Required 1 Required 2 Required 3 Required 4 Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: (Post all amounts separately. Do not combine/add any dollar amounts when posting to the T-accounts.) a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling, General, and Administrative Expenses. g. Sales Revenue. Show less Raw Materials Inventory Work in Process Inventory 6,400 Beg. Bal 16,400 Beg. Bal. End. Bal. 16,400 End. Bal. 6.400 Cost of Goods Sold Finished Goods Inventory 22.000 Beg Bal. Beg. Bal. End. Bal. 22.000 End. Bal. 0 Manufacturing Overhead Selling, General, and Administrative Expenses Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. Sales Revenue Beg. Bal. End. Bal. 0 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. Unadjusted Gross Profit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the amount of over- or underapplied overhead. Manufacturing Overhead Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. Adjusted Gross Profit