Question 2 (28 marks) ABC company had the following transactions and events during the year ended 31 March 2022. The company uses direct labor dollars as the allocation base. For the current year, the estimated overhead was $777,000 and estimated direct labor cost was $350,000. Actual costs incurred follows: a. Purchased raw materials on account, $567,000. b. 10% of raw materials purchased was requisitioned as indirect materials. c. Direct labor for production is $320,000, indirect labor is $125,000. d. Some costs for the company and their percentage for factory are shown below, with the remaining percentage for administration costs. Other costs for the company Total $ Percentage spent in factory Property tax 100,000 90% Utilities 90,000 89% Depreciation 150,000 75% Insurance 180,000 80% Cleaning service fee 85,000 70% Maintenance fee 50,000 90% The balances of inventory follow: Beginning Ending Raw materials $8,000 $25,010 Work-in-process 7,500 572,650 Finished goods 25,010 487,810 Required: a) Compute the predetermined overhead rate for the year. (2 marks) b) Compute the amount of underapplied or overapplied overhead for the year. Prepare the adjustment entry for adjusting any underapplied or overapplied overhead to cost of goods sold. c) Prepare a schedule of cost of goods manufactured for the year. d) Prepare a schedule of cost of goods sold. (6 marks) (10 marks) (5 marks) e) The company sells the inventory at a markup of 30% on its costs of goods sold, before any adjustment for the overhead. The company has a net loss of $5,000. Prepare the income statement for the year ended 31 March 2022. (Show the selling expense and administrative expense separately. Not all expenses are shown above.) (5 marks)