Problem Information: Jackson Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000

Jackson Co. applies overhead to production using direct labor cost. As of the beginning of the year, Jackson co. estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000.

The following transactions occurred during the year: 1. Purchased $100,000 of raw materials on account.

2. Used $15,832 raw materials In production (use the last 5 digits of your student ID number as the dollar value of raw materials used). Of the materials used, 80% were classified as direct and 20% as indirect.

3. Incurred and paid wages and salaries of $600,000. The wages were classified as: Direct labor $525,000 Indirect labor $ 75,000 Selling and administration $ 230,000

4. Incurred the following additional costs: Miscellaneous manufacturing overhead costs (this amount does not include costs of indirect materials, indirect labor and depreciation) $ 85,000 Selling and Administrative costs $230,000

5. Recorded total depreciation of $120,000, related to: Factory manufacturing equipment $75,000 Equipment used for selling and administrative purposes $45,000

6. Work in process totaling $800,000 was transferred to Finished Goods during the year.

7. During the year, finished goods costing $1,000,000 were sold for $1,500,000.

REQUIRED. Round all answers to the nearest dollar.

1. (1 point) Compute the predetermined overhead rate Jackson Co. will use to apply MOH to Work-in-Process.

2. (1 point) Compute the amount of overhead applied to Work-in-Process during the year.

3. (3 points) Compute the ending balances in Raw Materials, Work-in-Process, and Finished Goods accounts (hint: dont forget to include beginning balances).

4. (2 points) Compute the amount of over- or under-applied overhead for the year (be sure to label it as over or under applied).

5. (2 points) Assuming Jackson Co. closes under or over-applied overhead to Cost of Goods Sold, compute adjusted COGS for the period.

6. (2 points) Prepare a traditional format income statement for the year (ignore income taxes).

7. (1 point) Clarity of supporting computations.