Perez Mfg.'s August 31 inventory of raw mi 2.5 August 31 inventory of raw materials is $150,000. Raw materials purchases in September are PROBLEM SETB , and factory payroll cost in September is $232.000. Overhead costs incurred in September are: inairect materials, $30,000: indirect labor. $14,000; factory rent. $20.000; factory utilities, $12,000; and Problem 15-1B y equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. Job 114 is sold for $380,000 cash in September. Costs for the three jobs worked on in September follow. Production costs computed and recorded; reports Job 114 Job 115 Job 116 prepared Balances on August 31 P1 P2 P3 P4 Direct materials .. $ 14,000 $ 18,000 Direct labor.. 18,000 16,000 Applied overhead 9,000 8,000 Costs during September Direct materials ... 100,000 170,000 $ 80,000 Direct labor........... 30,000 68,000 120,000 Applied overhead.... Status on September 30....... Finished (sold) Finished (unsold) in process Required 1. Determine the total of each production cost incurred for September (direct labor, direct materials, and applied overhead) and the total cost assigned to each job (including the balances from August 31). 2. Prepare journal entries for the month of September to record the following. a. Materials purchases (on credit). b. Direct materials used in production. c. Direct labor paid and assigned to Work in Process Inventory. d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) g. Transfer of Jobs 114 and 115 to the Finished Goods Inventory. h. Cost of Job 114 in the Cost of Goods Sold account. i. Revenue from the sale of Job 114. J. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The Check (21 $3.000 amount is not material.) Overapplied 3. Prepare a schedule of cost of goods manufactured. (3) Cost of goods 4. Compute gross profit for September, Show how to present the inventories on the September 30 bal- manufactured, $500.000 ance sheet. Analysis Component 5. The over- or underapplied overhead adjustment is closed to Cost of Goods Sold. Discuss how this adjustment impacts business decision making regarding individual jobs or batches of jobs