Waterway Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $25,000, direct labor $15,000, and manufacturing overhead $20,000. As of January 1, Job 49 had been completed at a cost of $112,500 and was part of finished goods inventory. There was a $18,750 balance in the Raw Materials Inventory account. During the month of January, Waterway Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $152,500 and $197,500, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $112,500 on account. 2. Incurred factory labor costs of $87,500. Of this amount $20,000 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $21,250; indirect labor $25,000; depreciation expense on equipment $15,000; and various other manufacturing overhead costs on account $20,000. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $12,500 $6,250 51 48,750 31,250 52 37,500 25,000(a) V Your answer is correct. Calculate the predetermined overhead rate for 2020, assuming Waterway Company estimates total manufacturing overhead costs of $1,050,000, direct labor costs of $875,000, and direct labor hours of 25,000 for the year. Predetermined overhead rate 120 % eTextbook and Media List of Accounts Attempts: 1 of 5 used ( C )(c) V Your answer is correct. Prepare the journal entries to record (1) the purchase of raw materials, (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) Raw Materials Inventory 112500 Accounts Payable 112500 (2) Factory Labor 87500 Factory Wages Payable 67500 Employer Payroll Taxes Payable 20000 (3) Manufacturing Overhead 81250 Raw Materials Inventory 21250 Factory Labor 25000 Accumulated Depreciation-Equipment 15000 Accounts Payable 20000(d1) Prepare the journal entries to record the assignment of (1) direct materials, (2) direct labor, and (3) manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3) eTextbook and Media List of Accounts Save for Later Attempts: 0 of 5 used Submit