Starz Invitations & More does customized, hand-crafted memorabilia, in which each batch of items is a job. The company has a highly labour intensive production process, so it allocates manufacturing overhead based on direct labour hours. Starz pre-determined overhead application rate for 20X8 was computed from the following data: Total estimated factory overheads Total estimated direct labour hours $2,400,000 40,000 At the end of May 20X8, Starz Invitations & More reported the following inventories Materials Inventory WIP Inventory Finished Goods Inventory Bal. $95,000 Bal. 3208,000 Bal. $176,000 During June 20X8, Starz Invitations & More actually used 3,ooo direct labour hours and recorded the following transactions. s on account 310,000 00.00O 420,000 (ii) Manufacturing wages incu (iii) | Materials requisitioned (includes $30,000 of indirect materials) (iv) | Assigned manufacturing wages, 85% (v)Depreciation expense on factory equipment used on the different jobs (v)Other manufacturing overhead incur (vi) (vii)Cost of jobs comp (viii) | Cost ofjobs sold (on account) at a margin of 33,3% on sales ur, 15% in our $95,000 35,000 ed manu g overhea ne 20 995,000 $960,000 Required: (a) Compute Starz's predetermined manufacturing overhead rate for 20X8. (2 mark) (b) State the journal entries necessary to record the above transactions in the general journal. Assume that Starz uses the perpetual inventory system. (10 marks) (c) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account and state the balance on the account before performing end of period closing entries. Show the journal entries necessary to dispose of the variance. (d) What is the balance in the Cost of Goods Sold account after the adjustment? (e) Compute Starz's gross profit earned on the jobs completed. (3 marks) (2 marks) (2 marks)