Problem 1 (Ch.3): Bruno Corporation is a manufacturer that uses job-order costing. On January 1, the company's Inventory balances were as follows: Raw materials Work in process Finished goods $ 40,000 $ 18,000 $ 35,000 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year. Raw materials were purchased on account, $510.000 Raw materials use in production, $480,000. All of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor. $600,000 indirect labor, $150,000; selling and administrative salaries, $240,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing). $367.000. Incurred various manufacturing overhead costs (e... depreciation, insurance, and utilities). $500,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year. Jobs were sold on account to customers during the year for a total of $2,800,000. The jobs cost $1,690,000 to manufacture according to their job cost sheets. a. Prepare the journal entries and l-accounts for the above transactions b. Calculate the manufacturing overhead applied. c. Prepare a Schedule of Cost of Goods Manufactured d. Was the overhead underapplied or overapplied? By how much? e. Prepare a Schedule of Cost of Goods Sold for the month. f. Prepare an Income Statement for the year. (The company doses any underapplied or overapplied overhead to Cost of Goods Sold.)