Savallas Company manufactures unique one-of-a-kind electric golf carts in its Lethbridge production factory. The company employes highly trained and experienced workers in the factory and therefore applies overhead cost to jobs on the basis of direct labour hours. In computing an overhead rate for the year, the company's estimates were as follows: manufacturing overhead cost: $448,000., direct labour cost: $640,000. and direct labour hours: 25,600. The company has provided the data in the following table: BEGINNING ENDING (Nov. 1, 2016) (Oct. 31, 2017) raw materials inventory $21,000 $ 16,000 work in process inventory $44,000 $40,000 finished goods inventory $68,000 $60,000 The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials were purchased on account: $295,000 b. Of the raw materials that were used in production 80% were direct materials and 20% indirect materials. c. The following actual costs were incurred for employee services: Direct labour $700,000 Indirect labour $283,750 Sales commissions $45,000 Administrative salaries $75,000 d. Heat, power and water costs were incurred in the factory: $65,000. e. Prepaid insurance expired during the year; $15,000 (75% relates to factory operations and 25% relates to selling and administrative activities). f. Manufacturing overhead was applied to production. g. The direct labour rate per hour has been the same for the last three years and is the rate that was used in calculating the above estimates. h. Goods that cost $1,442,000 to manufacture according to their job cost sheets were sold for $2,000,000 j. The corporate income tax rate is 11%. j. Depreciation was recorded for the year: $90,000 (two thirds to the factory and one third to selling and administrative operations) REQUIRED: 1. Calculate the following: (4 marks) (1) the direct labour rate per hour (ii) the predetermined manufacturing overhead rate per hour (iii) the actual number of direct labour hours worked in the year (iv) the applied manufacturing overhead for the year 2. if 500 direct labour hours had been incurred in the ending work in process inventory at October 31, 2017, calculate the specific costs (direct materials, direct labour and manufacuturing overhead) comprising the ending work in process inventory at October 31, 2017 (2 marks) 3. Record the 2017 transactions (including the opening and closing balances) in the following seven "T" accounts (12 marks): raw materials inventory, work-in-process inventory, finished goods inventory, cost of goods sold, manufacturing overhead, operating expenses and sales. 4. Prepare the journal entry to prorate any under or over applied manufacturing overhead if the company follows International Accounting Standard 2 (6 marks) 5. Prepare a schedule of cost of goods manufactured for the year ended October 31, 2017 assuming the company has posted the journal entry in #4 above. (10 marks) 6. Prepare an income statement for the year ended October 31, 2017 assuming the company has posted the journal entry in #4 above. (6 marks)