Required:

Prepare an income statement for year ended December $31.$

Manufacturing Overhead Allocation Base and Calculating the Cost of Jobs. Walsh

Company expects to incur $$3,000,000$ in manufacturing overhead costs this year. During

the year, it expects to use $60,000$ direct labor hours at a cost of $$500,000$ and $75,000$

machine hours.

Required:

a$.$ Calculate the predetermined overhead rate based on direct labor hours, direct labor

cost$,$ and machine hours.

b$.$ Why might the company prefer to use machine hours to allocate manufacturing

overhead?

c$.$ Using each of the predetermined overhead rates calculated in requirement a and the

data that follows for job $128,$ determine the cost of job $128.$

Exercises: Set B

Raw Materials Inventory Journal Entries. The balance in Taylor Company's raw

materials inventory account was $$110,000$ at the beginning of September. Raw materials

purchased during the month totaled $$50,000.$ Taylor used $$17,000$ in direct materials and

$$8,000$ in indirect materials for the month.

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