Seatwork: The Pittman Company manufactures special purpose machines to order. On January 1, there were two jobs in process, # 705 and #706. The following costs were applied to these jobs in the prior year: Direct material Direct labor Overhead Total Job No. 705 706 P 5,000 P 8,000 4,000 3,000 4,400 P13,400 3,300 P14,300 During January, the following transactions took place: Raw material costing P40,000 was purchased on account. * Jobs #707, #708, and #709 were started and the following costs were applied to them: Direct materials Direct labor JOB 707 P3,000 5,000 708 P10,000 709 P7,000 6,000 4,000 * * * Job #705 and Job #706 were completed after incurring additional direct labor costs of P2,000 and P4,000, respectively Wages paid to production employees during January totaled P25,000. Depreciation for the month of January totaled P10,000. Utilities bills in the amount of P10,000 were paid for operations during December. Utilities bills totaling P12,000 were received for January operations. * Supplies costing P2,000 were used. Miscellaneous overhead expenses totaled P24,000 for January. Actual overhead is applied to individual jobs at the end of each month using a rate based on actual direct labor costs. Required: a. Prepare the necessary journal entries b. Determine the January overhead rate. C. Determine the cost of each job. Prepare the job cost sheets d. Prepare a statement of cost of goods manufactured. 1) Journal entries Particulars Raw Material Inventory To Account Payable Work in Process Inventory (3000 +7000 +10000) Factory Overhead Control (Utilities Bill) To Raw Materials Inventory Work in Process Inventory (5000+6000 + 4000+2000+4000) Factory Overhead Control (25000+4000+2000) To Payroll Amount Amount 40000 40000 20000 2000 22000 21000 25000 46000 Factory Overhead Control To Cash 27000 27000 Work in Process Inventory (5000+ 6000+4000) *110% 16500 To Factory Overhead Applied 16500 Depreciation 10000 To Fixed Asset 10000 Factory Overhead Control 24000 To Miscellaneous Overhead 24000 Actual Overhead rate depend on direct labour = Overhead/labour cost = 4400/4000 =110%