Problem 16-1A Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 21,400 , direct labor $ 12,840 , and manufacturing overhead $ 17,120 . As of January 1, Job No. 49 had been completed at a cost of $ 96,300 and was part of finished goods inventory. There was a $ 16,050 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $ 130,540 and $ 169,060 , respectively. The following additional events occurred during the month.

1. Purchased additional raw materials of $ 96,300 on account.

2. Incurred factory labor costs of $ 74,900 . Of this amount $ 17,120 related to employer payroll taxes.

3. Incurred manufacturing overhead costs as follows: indirect materials $ 18,190 ; indirect labor $ 21,400 ; depreciation expense on equipment $ 12,840 ; and various other manufacturing overhead costs on account $ 17,120 .

4. Assigned direct materials and direct labor to jobs as follows.

Job No. Direct Materials Direct Labor

Job No.	Direct Materials	Direct Labor
50	$10,700	$5,350
51	$41,730	$26,750
52	$32,100	$21,400

Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $898,800, direct labor costs of $749,000, and direct labor hours of 21,400 for the year. (Round answer to the nearest whole percent, e.g. 25%.)

Predetermined overhead rate = %

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Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job No. 50.

Job No. 50

Date	Direct Materials	Direct Labor	Manufacturing Overhead
Beg.
Jan.
Totals

Cost of completed job	?
Direct materials	?
Direct labor	?
Manufacturing overhead	?
Total cost	?

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Job No. 51

Date	Direct Materials	Direct Labor	Manufacturing Overhead
Beg.
Jan.
Totals

Cost of completed job	?
Direct materials	?
Direct labor	?
Manufacturing overhead	?
Total cost	?

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Job No. 52

Date	Direct Materials	Direct Labor	Manufacturing Overhead
Jan

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Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.

No	Account Titles and Explanation	Debit	Credit
1)	x
	x
2)	x
	x
	x
3)	x
	x
	x
	x

x

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Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1)
2)
3)

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Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry to record the completion of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

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Prepare the journal entries to record the sale of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No	Account Titles and Explanation	Debit	Credit
1)	Accounts Receivable
	Sales Revenue
	(To record sale of jobs)
2)	Cost of Goods Sold
	Finished Goods Inventory
	(To record cost of jobs)

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What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of?

Finished Goods Inventory $___________________

What is the amount of over- or underapplied overhead?

Manufacturing Overhead $_____________________