Panoramic Paint Company uses a job-order costing system and paints aircraft. The company had two jobs in process at the beginning of the year. Assume that the costs identified below are all of the costs assigned to the jobs. The following information is available:

• The company applies manufacturing overhead based on labor hours. Budgeted overhead and labor hours for the year were anticipated to be $100,000 and 2,500 hours, respectively.
• The company worked on 4 airplanes during the first quarter. Direct materials used, direct labor incurred, and labor hours consumed were as follows:

  Manufacturing Overhead Table

  Job #	Direct Material	Direct Labor ($)	Direct Labor Hours
  1	$5,000	$2,500	100
  2	$4,000	$2,000	80
  3	$4,500	$2,250	90
  4	$6,000	$3,000	120
  Totals	$19,500	$9,750	390

• Manufacturing overhead during the first quarter included charges for depreciation ($1,000), indirect labor ($4,500), indirect materials used ($2,000) and other factor costs ($3,500).
• All four jobs were completed during the quarter.

Instructions

To complete this assignment, include the following information in a document:

1. Determine Panoramic Paint Companys predetermined overhead application rate.
2. Prepare journal entries to record the following transactions:
   1. The issuance of direct material to production and the direct labor incurred.
   2. The manufacturing overhead incurred during the quarter.
   3. The application of manufacturing overhead to production.
   4. The completion of the four jobs.
   1. Your journal entries should be prepared by placing the name of the account to be debited near the margin and the name of the account to be credited indented from the margin. Dollar amounts debited should be to the left and dollar amounts credited should be to the right. An as recorded in a journal entry is shown below.

Debit and Credit Accounts

Cash	$10,000
Sales	$10,000

1. 1. 5. Briefly describe in no more than 2 paragraphs the difference between process and job-order costing.