PART B: PROBLEM SOLVING QUESTION QUESTION 1 (35 MARKS) Hanss Incorporation is a manufacturing firm that uses job order costing system. The company has two job in operations; Job S1 (200 units of kitchen cabinets) and Job 82 (600 units of exclusive display shelves). On January 1, 2016 the beginning of its fiscal year, the company's inventory balances were as follows: JOB S1 JOB 32 Raw Material Inventory $20,000 - Work in Process Inventory $15,000 $5,000 Finished Goods Inventory $30,000 - The company applies manufacturing overhead cost to jobs on the basis of machine-hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur $450,000 in manufacturing overhead cost. The following transactions were recorded for the year. 1. Raw materials were purchased on account, $410,000. 2. Materials were requisitioned for use in production as follows: 0 Job S1: 60 pieces of stacking block @ $1,000 per block. 0 Job 82: 100 pieces of solid wood @ $3,000 per piece. 0 $20,000 of indirect materials 3. The following costs were incurred for employee services: 0 Job 81: 1,000 direct labor hours @ $5 per hour. 0 Job 82: 2,500 direct labor hours @$28 per hour. 0 General factory workers, $95,000. 0 Factory supervisors, $15,000. 0 Sales personnel, $90,000. 0 Management personnel, $20,000. Sales travel costs incurred was $17,000. Utility cost in the factory paid was $43,000. Advertising cost paid was $180,000. Depreciation was recorded for the year, 350,000 (80% relates to factory operations, and 7'99\"? 20% relates to selling and administrative activities). 8. Prepaid insurance expired during the year, $10,000 (70% relates to factory operations, and 30% relates to selling and administrative activities). 9. Manufacturing overhead was applied to production. Due to greater than expected demand for its products, the company worked 80,000 machinehours during the year as follow: 0 Job 81: 15,000 machine hours 0 Job 82: 65,000 machine hours 10. Goods completed and sold are as follow: 0 Job Si: 170 units were completed, 70 units were sold @ $1,200 per unit. 0 Job 82: 450 units were completed, 300 units were sold @ $5,000 per unit. 11. The adjustment for over/under application of manufacturing overhead was made at the end of the year