REQUIRED: 1) Calculate the predetermined overhead rate (POHR) for the production process

2) Record the manufacturing process in journal.

PART B: PROBLEM SOLVING QUESTION QUESTION 1 (35 MARKS) Hanss Incorporation is a manufacturing firm that uses job order costing system. The company has two job in operations; Job S1 (200 units of kitchen cabinets) and Job S2 (600 units of exclusive display shelves). On January 1, 2016 the beginning of its fiscal year, the company's inventory balances were as follows: JOB S1 JOB S2 $20,000 Raw Material Inventory Work in Process Inventory Finished Goods Inventory $15,000 $5,000 $30,000 C C c The company applies manufacturing overhead cost to jobs on the basis of machine-hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur $450,000 in manufacturing overhead cost. The following transactions were recorded for the year. 1. Raw materials were purchased on account, $410,000. 2. Materials were requisitioned for use in production as follows: Job S1: 60 pieces of stacking block @ $1,000 per block. Job S2: 100 pieces of solid wood @ $3,000 per piece. $20,000 of indirect materials 3. The following costs were incurred for employee services: Job S1: 1,000 direct labor hours @ $5 per hour. Job S2: 2,500 direct labor hours @$28 per hour. General factory workers, $95,000. o Factory supervisors, $15,000. Sales personnel, $90,000. c Management personnel, $20,000. 4. Sales travel costs incurred was $17,000. 5. Utility cost in the factory paid was $43,000. 6. Advertising cost paid was $180,000. 7. Depreciation was recorded for the year, 350,000 (80% relates to factory operations, and 20% relates to selling and administrative activities). 8. Prepaid insurance expired during the year, $10,000 (70% relates to factory operations, and 30% relates to selling and administrative activities). 5 0 0 9. Manufacturing overhead was applied to production. Due to greater than expected demand for its products, the company worked 80,000 machine-hours during the year as follow: Job S1: 15,000 machine hours Job S2: 65,000 machine hours 10. Goods completed and sold are as follow: Job S1: 170 units were completed, 70 units were sold @ $1,200 per unit. Job S2: 450 units were completed, 300 units were sold @ $5,000 per unit. 11. The adjustment for over/under application of manufacturing overhead was made at the end of the year. 0