system and applies manufacturing overhead cost to jobs on the basis of direct labor hours. predetermined overhead rate was based on a cost formula that estimated $400,000 of manufacturihg overhead for an estimated allocation base of 1000 direct labor hours. The company's inventory balances on June 2021 were as follow: Raw Materials Work in Process Finished Goods During the month the following transactions were completed: a. Raw materials were purchased on account, $110,000. b. Raw materials were issued into production, $180,000 [30% direct and 20% indirect). Employee salaries and wages were accrued as follows: direct labor (875 hours}, $200,000,- indirect Iabor, $32,000; and selling and administration salaries, $90,000. d Utility costs were incurred in the factory, $55,000. e Advertising costs were incurred and paid, $100,000. f. Prepaid insurance policy expired during the month, $20,000 [90% related to factory}. g Depreciation for the month was recorded as $180,000 (85% related to factory assets] h Manufacturing overhead was applied to jobs. i. Production of goods that cost $200,000 to complete has been sent to the showroom. j. Sales for the month totaled $1,000,000 and were all on credit. The total cost to manufacture these goods according to their job cost sheets was $720,000. Required: 1. Prepare journal entries to record the June 2021 transactions (20 marks}. 2. Post the appropriate journal entries to the T-accounts of the inventory accounts and the Manufacturing Overhead account. Compute the ending balances of the accounts (7' marks). 3. Is Manufacturing Overhead over applied or under applied for the month? Prepare the appropriate journal entry for this amount [3 marks]. 4. Job 007 was one of the many jobs started and completed during the year. The job required $10,500 in direct materials and 10 hours of direct labor time at a wage rate of $220 per hour. The job contained twenty units. If the company bills at a price 40% above the unit roduct cost on the 'ob cost sheet, what price per