Top Products Inc. uses a job-order costing system and applies manufacturing overhead costs to jobs on a basis of direct labour hours. A trial balance for the company as of April 1, 2019 follows: Cash $18,000 Accounts Receivable $40,000 Raw Materials Inventory $25,000 Work In Process Inventory $32,000 Finished Goods Inventory $60,000 Prepaid Insurance $25,000 Plant and Equipment $400,000 Accumulated Depreciation $148,000 Accounts Payable $90,000 Salaries and Wages Payable $25,000 Capital Stock $250,000 Retained Earnings $87,000 $600,000 $600,000 Transactions for the year just ended on March 31, 2020 are as follows: a) Raw materials were purchased on account, $180,000. b) The ending raw materials inventory on March 31, 2020 was $15,000. c) Indirect raw materials used in production was $22,000. d) Utility costs were incurred in the factory, $42,000. e) Factory labour costs (both direct and indirect labour) were $300,000 and selling and administrative salaries were $120,000. f) Insurance expired during the year, $20,000 (75 percent related to the factory and 25 percent related to selling and administrative activities) g) Advertising costs were incurred, $150,000. h) Depreciation was recorded for the year, $55,000 (80 percent related to factory assets, and the remainder related to selling and administrative assets) i) The unadjusted cost of goods manufactured for the year was $608,800. j) The unadjusted ending finished goods inventory was $75,000. k) Sales, all on account, totaled $1,500,000 for the year. Other information: i. The corporate income tax rate is 20%. ii. The following estimates were made at the start of the year: manufacturing overhead cost, $150,000; direct labour cost: $250,000; direct labour hours: 5,000. 3 iii. Manufacturing overhead is applied to jobs based on direct labour hours. iv. The budgeted direct labour rate per hour is the same as the actual direct labour rate per hour. v. The total actual manufacturing overhead cost (including indirect labour) for the year was $150,000. vi. The ending work in process inventory at March 31, 2020 consisted of only one item. It had $12,000 of direct materials and 250 direct labour hours charged to it. REQUIRED: 1. Calculate the following: (2 marks) (i) the direct labour rate per hour. (ii) the predetermined manufacturing overhead rate per direct labour hour. 2. Calculate the following: (3 marks) (i) the individual amounts of both indirect and direct labour cost for the year. (ii) the actual number of direct labour hours worked in the year. (iii) the applied manufacturing overhead for the year. 3. Calculate the specific costs (direct materials, direct labour and manufacturing overhead) and the total cost of the ending work in process inventory at March 31, 2020 (2 marks) 4. Record the fiscal 2020 transactions (including the opening and closing balances) in the following seven "T" accounts: raw materials inventory, work-in-process inventory, finished goods inventory, cost of goods sold, manufacturing overhead, operating expenses and sales. (12 marks) 5. Prepare the journal entry to prorate any under or over applied manufacturing overhead if the company follows International Accounting Standard 2 (6 marks) 6. Prepare a schedule of cost of goods manufactured for the year ended March 31, 2020 assuming the company has posted the journal entry in #4 above. (10 marks) 7. Prepare an income statement for the year ended March 31, 2020 assuming the company has posted the journal entry in #5 above. (6 marks)