The Cycle More Company manufactures high end bicycles. The controller for the company Ima Sewsique, spent much of the past quarter at home due to a lingering illness. As a result the company records are incomplete.

The Cycle More Company manufactures high end bicycles. The controller for the company Ima Sewsique, spent much of the past qarter at home due to a lingering illness. As a result the company records are incomplete. The existing records are presented below Beginning Balances 1/1/2018 Raw Materials Inventory $7,500 $7,500 Finished Goods Inventory Ending Balances 12/31/2018 Raw Materials Inventory Work in Process Finished Goods Inventory $1,525 $1,025 Additional Information: $98,000 $305,000 $103,000 $143,000 400% Raw Materials Purchased Raw Materials Used in Production Prime Costs Overhead Rate based on Direct Labor Dollars Required: 1. Prepare T-accounts for all of the Manufacturing Inventory Accounts and Cost of Goods Sold. Determine Conversion costs for the period and the total manufacturing costs added to the Work In Process. List any direct costs and explain how your determination was made. 2. 3. Consider the composition of manufacturing overhead. Label the items listed as either a variable cost, a fixed cost, or a mixed cost. 4. The owners of Cycle More have chosed to apply overhead based on direct labor dollars. Given the composition of your list of overhead items in your response to question 3 (above), when would direct labor be an accurate predictor of the cost of overhead? 5