QUESTION 1-JOB ORDER COSTING Johnson Manufacturing company, a manufacturer of custom-made drones, uses a job order cost system to accumulate costs in its manufacturing plant. The company allocates manufacturing overhead on the basis of direct labour hours. The business expects to incur $ 3,500,000 of manufacturing costs during the year and to use 2,000,000 direct labour hours. The company's inventory balances on April 1, 2022 (the start of its fiscal year), were as follows: Raw Materials Work in process Finished Goods $ 32,000 20,000 48,000 During the year, the following transactions were completed: a. Raw materials were purchased on account, $170,000. b. Raw materials were issued from the storeroom for use in production, $ 180,000 ( 80 percent direct and 20 percent indirect). c. Employee salaries and wages were accrued as follows: direct labour, $ 200,000; indirect labour, $ 82,000; and selling and administrative salaries, $ 90,000. d. Utility costs were incurred in the factory, $ 65,000. e. Advertising costs were incurred, $ 100,000. f. Prepaid insurance expired during the year, $ 20,000 (90 percent related to factory operations, and 10 percent to selling and administration activities). g. Depreciation was recorded, $ 180,000 ( 85 percent related to factory assets, and 15 percent related to selling and administrative assets. h. Overhead cost was applied to production at the predetermined overhead rate calculated in Part 1 i. Goods costing $700,000 to complete were transferred to the finished goods warehouse. j. Sales for the year (all on account) totalled $1,000,000. These goods had cost $720,000 to manufacture. REQUIRED 1. Compute the predetermined Overhead rate. (2 marks) 2. Prepare journal entries to record the transactions for the year. (10 marks) 3. Prepare T-accounts for Raw Materials, Work in process, Finished Goods, Manufacturing Overhead and Cost of Goods Sold. Post the appropriate parts of your journal entries to these T-accounts. Compute the ending balance in each account. (Do not forget to enter the opening balances in the inventory accounts). (8 marks) 4. Is manufacturing over-applied or under-applied for the year? Prepare a journal entry to close this balance to cost of Goods Sold. (2 marks) 5. Job 42 was one of the many jobs started and completed during the year. The job required $8,000 in direct materials and 39 hours of direct labour time at a total direct labour cost of $9,200. The job contained four units. If the company bills at a price 60% above the unit cost on the job cost sheet, calculating the selling price per unit charged to the customer. (3 marks)