Problems 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 sold on account during the month for $$122,000$ and $$158,000,$ respec$-$

tively. The following additional events occurred during the month.

Purchased additional raw materials of $$90,000$ on account.

Incurred factory labor costs of $$70,000.$

Incurred manufacturing overhead costs as follows: depreciation on equipment $$12,000$ and various

other manufacturing overhead costs on account $$16,000.$

Assigned direct materials and direct labor to jobs as follows.

Assigned indirect materials of $$17,000$ and indirect labor of $$20,000.$

Instructions

a$.$ Calculate the predetermined overhead rate for $2022,$ assuming Lott Company estimates total manu$-$

facturing overhead costs of $$840,000,$ direct labor costs of $$700,000,$ and direct labor hours of $20,000$

for the year.

b$.$ Open job cost sheets for Jobs $50,51,$ and $52.$ Enter the January $1$ balances on the job cost sheet for

Job $50.$

c$.$ 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.

d$.$ Prepare the journal entries to record the assignment of raw materials, factory labor, and manufactur$-$

ing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate

calculated in $($a$).$ Post all costs to the job cost sheets as necessary.

e$.$ Total the job cost sheets for any job$($s$)$ completed during the month. Prepare the journal entry $($or

entries$)$ to record the completion of any job$($s$)$ during the month.

f$.$ Prepare the journal entry $($or entries$)$ to record the sale of any job$($s$)$ during the month.

g$.$ What is the balance in the Finished Goods Inventory account at the end of the month? $($Hint: Use a

T$-$account for Finished Goods Inventory.$)$ What does this balance consist of$?$

h$.$ What is the amount of over$-$ or underapplied overhead?

P$15\mathrm{.}1($LO $1,2,3,4,5),$ AP Lott Company uses a job order cost system and applies overhead to produc$-$

tion on the basis of direct labor costs. On January $1,2022,$ Job $50$ was the only job in process. The costs

incurred prior to January $1$ on this job were as follows: direct materials $$20,000,$ direct labor $$12,000,$

and manufacturing overhead $$16,000.$ As of January $1,$ Job $49$ had been completed at a cost of $$90,000$

and was part of finished goods inventory. There was a $$15,000$ balance in the Raw Materials Inventory

account on January $1.$

Prepare entries and postings to job cost

sheets for a job order cost system.