QUESTION 2 (25 marks) Sherwood Shoes Company operates a job-order cost system to accumulate costs in its manufacturing plant. For the year ended June 30, 2011, the company's had the following beginning and ending inventories: Raw materials Work-in-process Finished goods July 1, 2010 June 30, 2011 $ 24,000 $ 21,000 41,000 46,000 48,000 39,000 The company applies overhead cost to jobs on a basis of direct labor costs. In computing an overhead rate for 2011, management has budgeted the following costs for 2011: Manufacturing overhead cost.. $ 126,000 Direct labor cost $ 84,000 During the year, the following actual costs were incurred: Factory utilities. $ 33,500 Direct labor cost... 80,000 Purchase of raw materials.. 7,000 Depreciation of factory equipment.. 18,000 Indirect labor...... 42,000 Property taxes of factory building.. 9,000 Maintenance of equipment.. 11,000 Rent of office building. 36,000 Bad debt expense.. 7,000 Administrative salaries... 156,800 Insurance of factory building. 12,000 Interest expense.. 3,360 Required: a) Compute the predetermined overhead rate (POHR) for 2011. (2 marks) b) Compute the amount of under-or over-applied overhead for the year. (2 marks) c) Prepare the schedule of costs of goods manufactured for the year. (Use the applied manufacturing overhead cost) (12 marks) d) Prepare the schedule of costs of goods sold for the year. (5 marks) e) f) Journalize the disposal of the under-or over-applied overhead for the year to Cost of goods sold (2 marks) Job #137 is one of the many jobs started and completed during the year. What total price (biding price) would have been charged to the customer if the job required $3,200 in materials and $4,200 in direct labor, and the company priced its jobs at 40 percent above cost of manufacturing? (Hint: use the applied overhead cost) (2 marks)