Question $1$

Georgia Woods Limited, manufactures furnitures to customers' specifications and uses job order costing. A predetermined overhead rate is used in applying manufacturing overhead to individual jobs. In Department One, overhead is applied on the basis of machine$-$hours, and in Department Two, on the basis of the direct labor hours. At the beginning of the current year, management made the following budget estimates to assist in detemining the overhead application rate:

Department One Department Two

Direct labor cost $$300,000$ $$225,000$

Direct labor hours $20,00015,000$

Manufacturing overhead $$420,000$ $$337,500$

Machine$-$hours $12,0007,500$

Production of a batch of custom furniture ordered by Tai Hing Cafe $($job no$\mathrm{.}48)$ was started early in the year and completed three weeks on January $29.$ The records for this job show the following cost information:

Job order for City Furniture $($job no$.48)$

Department One Department Two

Direct materials cost $$10,100$ $$7,600$

Direct labor cost $$16,500$ $$11,100$

Direct labor hours $1,100740$

Machine$-$hours $750500$

Selected additional information for January is as follows:

Department One Department Two

Direct labor hours$-$month of January $1,6001,200$

Machine$-$hours$-$ month of January $1,100600$

Manufacturing overhead incurred in January $$39,010$ $$26,540$

Required:

a$.$ Compute the predetermined overhead rate for each department.

b$.$Determine the total cost of the furniture produced for Tai Hing Caf$.$

c$.$Determine the price of the Job no$.48$ if it is priced at $30$ percent as gross profit. $($nearest to dollars$)$

d$.$ Prepare ALL necessary entries to record the sale $($on account$)$ of the furniture to Tai Hing Caf$.$ Narrations are required.

e$.$ Determine the over$-$ or underapplied overhead for each department at the end of January.