TRANSACTIONS FOR NORA'S TAX SERVICE 1 Nora started her tax service on January 1, 2019. She began by budgeting the 0 office overhead costs projected for the first year: Office Rent $36,000 Indirect Labor-secretarial and janitorial 100,000 Photocopying costs 8,000 Computer leasing costs (hardware and software) 24,000 Utilities 30,000 Insurance 10,000 Total Estimated Office Overhead for 2019 $208,000 2 Nora plans to work fifty 40-hour weeks in 2019, for a total of 2,000 direct labor hours. Calculate the Predetermined Overhead Rate Total Estimated Overhead / Estimated DL Hours: POR= 3 Nora set her Direct Labor Rate at $120 per hour. Each job cost sheet indicates the number of direct labor hours worked by Nora. Fill in the HOURS COLUMN for DL and FO; the job cost sheets have formulas to add these figures up. Note: for your convenience, the DL TOTAL and FO TOTAL are calculated below the sheets 4 Record the actual Office Overhead as follows: OFFICE OVERHEAD SALARIES PAYABLE ACCOUNTS PAYABLE PREPAID INSURANCE 10,500 4,000 2,000 1,500 3,000 ACC. DEPR. EQUIP 5 Make two summary entries to the T-accounts, as follows: WORK IN PROCESS SALARIES PAYABLE WORK IN PROCESS FACTORY OVERHEAD XXXX XXXX Nora's compensation (add up the DL figures on the job cost sheets) Applying office (add the FO figures on the cost sheets) XXXX 6 At this point, is the overhead over or underapplied and by how much? 0 Over or Under? By how much? 7 Jobs 101 and 102 were complete and delivered to customers. The customer for Job 101 was billed $5,000 and the customer for Job 102 was billed $7,000. The entry should look like this: Accounts Receivable Accounting Revenue Cost of Services Work in Process xXxXxX XXX XXXX Fill in costs of Job 101 + Job 102