Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's inventory balances were as follows Raw materials Work in process Finished goods $17,000 $10,400 $30,200 The company applies overhead cost to jobs on the basis of machine hours. For the current year, the company estimated that it would work 36,200 machine-hours and incur $157,470 in manufacturing overhead cost. The following transactions were recorded for the year a Raw materials were purchased on account $204,000 b. Raw materials were requisitioned for use in production $192.000 (80% direct and 20% indirect) c The following costs were incurred for employee services Direct labour Indirect labour Sales commissions Administrative salaries $161,600 $ 27,400 $36,600 $ 30,00 a Heat, power and water costs were incurred in the factory $42.900 e Prepaid insurance expired during the year $11.000 (85% relates to factory operations, and 15% relates to selling and administrative activities) 1 Advertising costs were incurred, $51000 o Depreciation was recorded for the year $61.200 (90% relates to factory operations and 10% relates to selling and administrative activities). hManufacturing overhead cost was applied to production. The company recorded 40.400 machine hours for the year Goods that cost $488,700 to manufacture according to their job cost sheets were transferred to the finished goods warehouse 1 Sales for the year totalled $709 300 and were all on account. The total cost to manufacture these goods according to their job cost sheets was 5483,300 Required: 1. Prepare journal entries to record the transactions given above (Do not found intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required in the first account field.) 2. Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your inventory accounts) Compute an ending balance in each account Raw Materials Manufacturing Overhead Beg Bal Beg Bal End. Bal 0 End. Bal Work in Process Cost of Goods Sold Bog Bal Bog Bal End Bal End Bal Finished Goods Beg Bal End. Bal 3-0. Is manufacturing overhead underapplied or overapplied for the year? Underapplied overhead Overapplied overhead 3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account (Do not round intermediate calculations and round your final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
