Sautter Advertising pays Lee Young $102,600 per year. Assume that Sautter's advertising agents are expected to work a total of 6,000 direct labor hours in 2018. Sautter's estimated total indirect costs are $144,000 and the allocation base used is direct labor hours.

1.	What is Sautter's predetermined overhead allocation rate?
2.	What indirect costs will be allocated to Client 507 if Lee Young, an advertising agent at Sautter Advertising, works 12 hours to prepare the magazine admagazine ad?

Requirement 1. What is Sautter's predetermined overhead allocation rate?

	/		=	Predetermined overhead allocation rate
	/		=

Requirement 2. What indirect costs will be allocated to Client 507 if Lee Young, an advertising agent at Sautter Advertising, works 12 hours to prepare the magazine admagazine ad?

	x		=	Indirect costs allocated
	x		=

and also,

Sunflower Company makes artificial flowers and reports the following data for the month.

Purchases of materials, on account	$51,000
Materials requisitions:
Direct materials	45,100
Indirect materials	600
Labor incurred (not yet paid):
Direct labor	21,600
Indirect labor	1,340

Begin by journalizing the entry for the purchase of materials on account.

Date			Accounts	Debit	Credit

Next, journalize the entry to record raw materials used in production.

Date			Accounts	Debit	Credit

Finally, journalize the entry to record the labor incurred in production but not yet paid.

Date			Accounts	Debit	Credit