Watson Manufacturing Company employs a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:

1). Direct materials requisitioned during the month:

Job 101 $25,000

Job 102 23,000

Job 103 24,000

$72,000

2). Direct labor incurred and charged to jobs during the month was:

Job 101 $33,000

Job 102 36,000

Job 103 27,000

$96,000

3). Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 70% of direct labor costs.

4). Actual manufacturing overhead costs incurred during the month amounted to $76,000.

5). Job 101 consisting of 1,000 units and Job 103 consisting of 200 units were completed during the month.

Instructions:

1. Prepare journal entries to record the above transactions. (5)

(b) Answer the following questions:

1. How much manufacturing overhead was applied to Job 103 during the month? ____________.

2. Compute the unit cost of Jobs 101 and 103. ___________.

3. What is the balance in Work In Process Inventory at the end of the month? _________.

4. Determine if manufacturing overhead was under- or overapplied during the month. How much? _________.