Production costs computed and recorded; reports prepared Lauzon Mfg.'s July 31 inventory of raw materials is $160,000. Raw materials purchases in August are $420,000, and factory payroll cost in August is $235,000. Overhead costs incurred in August are: indirect materials, $40,000; indirect labor, $12,000; factory rent, $15,000; factory utilities, $14,000; and factory equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. Job 114 is sold for $402,000 cash in August. Costs for the three jobs worked on in August follow. Job 114 Job 115 Job 116 Balances on July 31: Direct materials $ 12,000 Direct labor Applied overhead 16,000 8,000 $ 20,000 16,000 8,000 Costs during August: Direct materials 110,000 Direct labor Applied overhead Status on August 31 32,000 ? Finished (sold) Finished (unsold) In process 175,000 64,000 $ 70,000 122,000 ? Answers Required (cont): 3. Prepare a schedule of cost of goods manufactured. 4. Compute gross profit for August. Show how to present the inventories on the August 31 balance sheet. 5. The over- or underapplied overhead is closed to Cost of Goods Sold. Discuss how this adjustment impacts business decision making regarding individual jobs or batches of jobs.