Using the following information about transactions, answer the questions about Job Order Costing for Saibo Co.

The company has the beginning inventory for material 12,000 and purchase material $180,000 by cash. Beginning inventory in WIP was $15,000 only for Job No. 1.

There is no beginning inventory in FG.

For direct material $25,000 went to WIP as costs for Job No1, and $30,000 as costs for Job No 2. Direct labor used in production for Job No.1 was $40,000, and $35,000 for the Job No.2.

Utilities incurred, $50,000, 60% due to manufacturing facilities.

Administrative expenses, $55,000 incurred.

Advertising expenses of $34,000 incurred.

There are indirect materials of $22,000, and $28,600 of indirect labor costs incurred in the job.

The company uses direct labor costs as the allocation base for manufacturing overhead costs. The total estimated manufacturing overhead costs was $196,000 and the estimated direct labor costs are $140,000. Overhead costs are applied to Job No. 1 and Job No.2.

There is no other cost incurred for the production for Job No.1, the production was finished, and all of Job No.1 work was later sold for $225,000 on credit. Job No. 2 has finished the production but has not sold yet.

1-1 Calculate the predetermined overhead allocation rate for Saibo Co? [2]

1-2 Create Seven T accounts to show the above transactions. [23]

1-3 How much overhead costs are allocated to WIP? [3].

1-4 According to information above, what is the journal entry of the completion of the production? [4]

1-5 Prepare the journal entries for the sale of Job No.1 [6]

1-6 Make adjusting entries for MOHC and MOHA accounts by using COGS. Clearly state either over or under allocation. Then include all necessary information to T accounts. [4].

1-7 Assuming that these are only transactions occurred in Saibo Co. in 2017. Prepare income statement based on an adjusting entry based on using COGS (1-6). [5]