Problem 2 (40 pts) The Wright Stuff Corporation is a customized furniture design firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Balance Ending Balance Raw materials $ 14,550 $ 22,550 Work in process $ 27,550 $ 9,550 Finished Goods 62,550 77,550 Overhead is applied with a predetermined overhead rate based on machine hours. During its budget preparation period, Wright Stuff estimated that 33,550 machine-hours would be worked next year and $271,755 of manufacturing overhead costs would be incurred. The following transactions were recorded for the year: Raw materials were purchased, $315,550. 0 Employee costs were incurred included the following: direct labor, $377,550; indirect labor $96,550; and administrative salaries, $198,150. Selling costs, $147,550. Factory utility costs, $10,550. Depreciation for the year was $160,000 of which $144,000 is related to factory operations and $16,000 is related to selling general, and administrative activities. o Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,110 machine-hours. Sales for the year totaled $1,285,000. OO 1. What is the predetermined overhead rate? 2. What is the value of manufacturing overhead costs that should be applied for the year? 3. Given the costs listed, what are the actual manufacturing overhead costs incurred? (list the type of cost and the amount). 4. What is the amount of over or underapplied overhead? Specify whether it is over or underapplied. (Hint - remember the t-accounts we used at the beginning of the semester) Don't forget, this is an open book/open note test. SHOW ALL WORK, please. 5. What is the amount of direct materials used? 6. Assume that overhead applied is $251,896 what is cost of goods manufactured? 7. What is cost of goods sold before any adjustments for over or underapplied overhead? 8. Assume adjusted cost of goods sold is $914,200, prepare an income statement for the year