Prepare T-accounts for inventories, manufacturing overhead, and cost of goods sold. Compute an ending balance in each account.

Case # 02-Part B Flow of Costs Widget Division Hoffmarn Fall 2018 The ACME Company, a division of GTA, International manufactures a special industrial widget and uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars As with all GTA divisions all of the company's transactions with customers, employees, an suppliers are conducted in cash; there is no credit. The company accountant has not yet returned from his vacation and Mr. Santos is anxious to get the books closed The Widget Division was based in Chicago so their executives always enjoyed visiting GTA Intls corporate headquarters based in sunny Los Santos - especially during the winter months He has asked your team to journalize the transactions At the beginning of the period, the inventory balances were as follows $25,000 $10,000 $40,000 During the period, the following transactions were completed Raw materials Work In Process Finished Goods 1. Raw materials purchased for cash, $275,000 2. Raw materials requisitioned for use in production, $280,000 (materials costing $220,000 were charged directly to jobs, the remaining materials were indirect) 3. Costs for employee services were incurred as follows $180,000 Direct Labor Work In Process 72,000 Finished Goods 63,000 Admin Salaries 90,000 4. Rent for the year was $18,000 ($13,000 of this amount related to factory operations and the remainder related to selling and administrative activities) 5. Utility costs incurred in the factory, $57,000 6. Advertising costs incurred, $140,000 7. Depreciation recorded on equipment, $100,000. ($88,000 of this amount was on equipment used in factory operations; the remaining $12,000 was on equipment used in selling and administrative activities.) 8. Manufacturing overhead cost was applied to jobs 9. Goods that had cost $675,000 to manufacture according to their job cost sheets were completed 10.Sales for the year totaled $1,250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000