Itsu Manufacturing Company applies manufacturing overhead on the basis of direct materials costs. The estimates for 2000 were:

\footnotetext{

Direct materials costs

$\$ 500,000$

Manufacturing overhead 150,000

}

Following are the transactions of Itsu Manufacturing Company for 2000:

a. Raw materials purchased on account, $\$ 550,000$.

b. Raw materials issued to production, 90 percent for direct use and 10 percent for indirect use, for a total of $\$ 350,000$.

c. Direct labor costs, $\$ 500,000$.

d. Indirect labor costs, $\$ 50,000$.

e. Administrative and sales salaries, $\$ 140,000$ and $\$ 90,000$, respectively.

f. Utilities, $\$ 21,000$; plant depreciation, $\$ 40,000$; maintenance, $\$ 15,000$; miscellaneous manufacturing overhead, $\$ 4,000$. (These costs are allocated on the basis of plant floor space-administrative facilities, 500 square feet; manufacturing 2,500 square feet; sales facilities, 1,000 square feet.)
g. Manufacturing equipment depreciation, $\$ 12,000$.
h. Additional raw materials issued to production for direct use, $\$ 250,000$.
i. Manufacturing overhead is applied j. Recorded factory foreman's salary, $\$ 54,000$.
k. Ninety percent of existing Work-in-Process Inventory is transferred to Finished Goods Inventory. (Work-in-Process beginning inventory was $\$ 30,000$.)
1. All finished goods are sold. (Assume no beginning or ending inventories. Sales are marked up 50 percent of cost.)
$\mathrm{m}$. Over- or underapplied manufacturing overhead is closed to Cost of Goods Sold.
1. Prepare a joumal entry for each of the transactions. (Assume that all manufacturing overhead is a product cost.)
2. Given the following beginning inventory amounts, prepare a cost of goods manufactured schedule for 2000 for Itsu Manufacturing Company. Assume all beginning and ending raw materials amounts include only direct materials.
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Raw materials inventory . . . . . $80,000 Work-in-process inventory ... 30,000 Finished goods inventory . . . . -0-
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3. Interpretive Question: Comparing actual manufacturing overhead with estimates for 2000 , what would you recommend that Itsu Manufacturing Company estimate for manufacturing overhead costs in 2001?