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 $16,200 5,600 20,400 The following transactions occurred during January: (a) Purchased materials on account for $27,000. (b) Issued materials to production totaling $21,900, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $16,700 were recorded as follows: $10,600 for assembly workers 1,500 for factory supervision 2,900 for administrative personnel 1,700 for sales commissions (d) Recorded depreciation: $5,300 for factory machines, $1,400 for the copier used in the administrative office. (e) Recorded $1,300 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $5,100 in other factory costs in cash. (9) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. (h) 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. (i) Sold jobs costing $50,900. The revenue earned on these jobs was $66,170. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: Show less Raw Materials Inventory Work in Process Inventory 5,600 Beg. Bal. (a) 16,200 27,000 21,900 (b) Beg. Bal. (b) (c) (h) End. Bal. 21,300 (9) End. Bal. 5,600 Cost of Goods Sold Finished Goods Inventory 20,400 Beg. Bal. Beg. Bal. End. Bal. 20,400 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 (Required 1 Required 3 > 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 quired 2 Required 4 > Overapplied by Underapplied by 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