THIS QUESTION HAS MULTIPLE STEPS.

1) Pedriani Company uses a job order cost system and applies overhead on the basis of direct labor hours. On Jan01, 2017, Job No. 25 was the only job in process. Costs incurred prior to Jan01 on this job were as follows: direct materials $10,000; direct labor $6,000; and manufacturing overhead $9,000. Job No. 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $5,000 balance in the Raw Materials Inventory account.

During the month of January, the company began production on Jobs 26 and 27, and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month.

EDIT) HOURS: Job #25, 200; Job #26, 800; and Job #27, 600.

INSTRUCTIONS:

A: Calculate the predetermined overhead rate for the year 2017, assuming Company estimates total manufacturing overhead costs of $440,000, direct labor costs of $300,000, and direct labor hours of 20,000 for the year. Note: Use Direct Labor Hours to calculate the predetermined overhead rate.

B: Prepare entries to record: purchase of raw materials, factory labor costs incurred, and the manufacturing overhead costs incurred during the month of JAN.

C: Prepare entries to record the assignment of direct materials, direct labor, and mfg overhead costs to production. (In assigning overhead, use the rate calculated in a). Post all costs to the job cost sheets as necessary.

D: Total the job cost sheets for any job(s) completed during the month. Prepare the entry (or entries) to record the completion of any job(s) during JAN.

E: Prepare the journal entry (or entries) to record the sale of any job(s) during JAN.

F: What is the balance in the Work in Process Inventory account at the end of JAN?

G: What is the amount of over- or underapplied overhead?

1. Purchased additional raw materials of $45,000 on account. 2. Incurred factory labor costs of $33,500. Of this amount, $7,500 related to employer payroll taxes. 3. Incurred manufacturing overhead costs: indirect materials $10,000; indirect labor $9,500; deprec, expense on equipment $12,000; and various other manufacturing overhead costs on account $11,000. 4. Assigned direct materials and direct labor to jobs as follows. Job Direct Direct No. Materials Labor 25 $ 5,000 $3,000 17,000 12,000 27 13,000 9,000 5. Company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job were: Job #25, (b) See solution to part (e) for job cost sheets (c) Labor || Mfg Overhead (e) Job # 25 Date Direct Direct Labor Manufacturing Overhead 9,000 Beg 10,000 6,000 Total Total Cost of Job Job # 26 Date Direct Materials Direct Labor Manufacturing Overhead Beg Jan Total Total Cost of Job Direct Labor Manufacturing Overhead Job # 27 Date Direct Materials Beg Jan *$22 x 600 dic bc hr. (e) continued ... Journal entry for completion of jobs in JAN (T account) (T account) Work in Process Beginning balance Direct materials Direct labor Manufacturing overhead 35,200 84,000 Cost of completed jobs 25 and 26 Ending balance 35,200 The balance in this account consists of the current costs assigned to Job No. 27: Direct Materials ........... $13,000 Direct Labor ............... 9,000 Manufacturing Overhead ... 13.200 Total costs assigned ... $35.200 (h) (T account) Manufacturing Overhead Actual Applied (debit) (credit) Bal (Indicate either underapplied" or "overapplied" below) The balance in the Manufacturing Overhead account is: underapplied or overapplied. (Indicate one or the other