question 1. Sunset Products manufactures skateboards. The following transactions occurred in March.

1. Purchased $29,500 of materials on account.
2. Issued $1,950 of supplies from the materials inventory.
3. Purchased $26,900 of materials on account.
4. Paid for the materials purchased in transaction (1) using cash.
5. Issued $31,900 in direct materials to the production department.
6. Incurred direct labor costs of $34,500, which were credited to Wages Payable.
7. Paid $23,400 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.
8. Applied overhead on the basis of 110 percent of direct labor costs.
9. Recognized depreciation on manufacturing property, plant, and equipment of $6,900.

The following balances appeared in the accounts of Sunset Products for March.

Beginning Ending Materials Inventory $ 11,850 ? Work-in-Process Inventory 18,400 ? Finished Goods Inventory 66,900 $ 38,400 Cost of Goods Sold 74,900

Required:

a. Prepare journal entries to record the transactions.

b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

question 2. Southern Rim Parts estimates its manufacturing overhead to be $432,000 and its direct labor costs to be $1,080,000 for year 1. The first three jobs that Southern Rim worked on had actual direct labor costs of $67,000 

for Job 301, $92,000 for Job 302, and $185,000 for Job 303. For the year, actual manufacturing overhead was $389,000 and total direct labor cost was $832,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates.

 

Required:

a. How much overhead was assigned to each of the three jobs, 301, 302, and 303?

b. What was the over- or underapplied manufacturing overhead for year 1?