The following information comes from the accounting records of WYOMING CORPORATION, manufacturer of custom coffee mugs, for its manufacturing activities for the year ended September 30 2018:

Actual manufacturing overhead costs incurred:
	Indirect materials					$15,000
	Indirect labor					130,000
	Property taxes - factory					8,000
	Utilities - factory					70,000
	Depreciation - factory					240,000
	Insurance - factory					10,000
	Total actual manufacturing overhead incurred					$473,000
Other costs charged to jobs:
	Direct materials					$375,000
	Direct labor					60,000
Inventory information:
	Work in process, beginning					$40,000
	Work in process, ending					70,000
	Finished goods, beginning					120,000
	Finished goods, ending					135,000

The company uses a predetermined overhead rate to apply overhead to production on the basis of machine hours, since coffee-mug production is a highly automated process. Overhead for the year was originally budgeted at $475,000 and 19,000 machine hours were anticipated.

During the year, based on all of the jobs produced, a total of 19,400 machine hours were recorded for the year.

REQUIRED:

1. Why would the fact that production is highly automated have anything to do with the companys chose of machine hours as a basis for allocating overhead? WHY?

2. What was the predetermined overhead rate for the year?

3. What was the amount of overhead applied for the year?

4. USE T-ACCOUNTS to post all summary journal entries from the information above. Note: when posting the amounts for actual overhead, use separate T accounts for each of the 6 items shown above in order to make a complete entry.

5. What was the amount of mis-applied overhead for the year? Explain how to account for this and WHY that is proper.

6. Construct a schedule of raw materials used in production for the year ended September 30, 2018.

7. Construct a Schedule of Cost of Goods Manufactured for the year ended September 30, 2018.

8. Determine the cost of goods sold, and construct a Schedule of Cost of Goods Sold for the year ended September 30, 2018.

9. Prepare an income statement for WYOMING for the year ended September 30, 2018 (ignore income taxes).

Prepare the Inventory section of the Balance Sheet as of September 30, 2018