Jones Custom Furniture Manufacturing, Inc., made the following estimates at the beginning of the year, 2000 :

Budgeted direct labor costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $\$ 300,000$

Budgeted direct labor hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Budgeted manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $\$ 520,000$

Jones applies manufacturing overhead to specific job orders on the basis of direct labor hours.

During the month of January, the following transactions occurred for Job $\# 345$, an order for 10 custom oak chairs, manufactured in the first week of January 2000:

Jan. 3 Requisitioned direct materials (lumber, fabric, paint), $\$ 876$ (requisition \#11042); put into production on Job \#345.

3 Requisitioned indirect materials (glue, staples, sandpaper, and equipment grease), $\$ 154$ ( $\# 11045$ ), for use in manufacturing the 10 chairs for Job $\# 345$ and other subsequent jobs.

Jan. 7 Processed time card \#6655 for Employee \#214; 25 direct labor hours at tributed to Job \#345 at wage rate of $\$ 15$ per hour 7 Applied manufacturing overhead at the predetermined rate to Job \#345, based on the actual direct labor hours.
7 Processed the manufacturing supervisor's weekly salary of $\$ 1,000$. (This salary is considered indirect labor because the supervisor oversees all jobs in process and does not account for his time on a job-by-job basis.)
7 Job \#345 was completed and transferred to the finished goods warehouse to await shipment to the customer.
9 The 10 oak chairs Job \#345) were shipped to the customer. The sales in voice reflects a sales price of $\$ 3,000$ on account.
In addition to Job \#345, Jones completed 47 other job orders in January, and had seven others in process at month-end. The following information summarizes additional manufacturing transactions for Jones for the month of January (not relating to Job \#345).

a. Raw materials purchased on account, $\$ 102,675$.

b. Requisitioned raw materials to specific job orders, $\$ 90,430 ; 80$ percent direct materials, and the remainder indirect materials not directly attributable to any one specific job.

c. Incurred and paid direct labor wages totaled, $\$ 24,600$; an average of $\$ 15$ per hour for 1,640 total direct labor hours for January.

d. Applied manufacturing overhead at the predetermined rate to all jobs in progress on the basis of the actual direct labor hours incurred by job.

e. Incurred and paid supervisor salaries and other indirect manufacturing labor (e.g., maintenance labor) totaled, $\$ 7,000$.

f. Incurred and paid the following costs associated with the manufacturing process and facility:

$$
\begin{aligned}
& \text { Factory rent . . . . . . . . . . . . . . . . . } \$ 7,600 \\
& \text { Factory utilities. . . . . . . . . . . . . . } 2,700 \\
& \text { Insurance . . . . . . . . . . . . . . . . . . . } 1,200 \\
& \text { Miscellaneous. . . . . . . . . . . . . . } 1,900 \\
& \$ 13,400 \quad \end{aligned}
$$
g. Recorded depreciation of manufacturing equipment for the month, $\$ 5,500$.
h. The cost of the 47 jobs completed during the month as summarized by their individual job cost sheets totaled $\$ 125,446$.
i. Shipped all completed jobs to customers by month-end at a total sales price of $\$ 200,714$ on account.
j. Incurred and paid selling and administrative costs (e.g., administrative salaries, sales commissions, office supplies, office rent, etc.), $\$ 46,514$.

1.

a. Calculate Jones' predetermined overhead rate for the year 2000.

b. Prepare journal entries for the first seven transactions (relating to Job \#345). Omit explanations.

c. Create a job cost sheet, and record the accumulation of costs for Job \#345. Determine the total cost of manufacturing the 10 oak chairs.

d. Determine the gross margin earned on the 10 oak chairs.
2. Prepare the journal entries for transactions (a)-(j). Omit explanations 3. Close Manufacturing Overhead to Cost of Goods Sold (include all transactions noted for Job \#345).
4. Calculate Jones' total gross margin for January, including Job \#345.
5. Calculate Jones' total operating income for January.
6. Determine the ending January balances in the raw materials, work-in-process inventory, and finished goods inventories (assume no beginning balances).