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Lund Company applies manufacturing overhead to jobs using a predetermined overhead rate of 50% of direct labor cost. Any underapplied or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During March, the following transactions were recorded by the company: Raw materials (all direct materials): Purchased during the month Used in production $27.000 S28,000 Labor Direct labor hours worked during the month. Direct labor cost incurred Indirect labor cost incurred 2,500 S20,000 $5,500 Manufacturing overhead costs incurred (total) Inventories: Raw materials (all direct), March 31 Work in Work in process, March1 process, March 31 $7.500 S10,500 $14,000* *contains $5,000 in direct labor cost. 1. The Cost of Goods Manufactured for March was: A. $54,500 B. $61,500 C. $56,500 D. S57,000 2. The entry to adjust for the underapplied or overapplied manufacturing overhead cost for the month would include: A. a credit of $2,000 to Cost of Goods Sold B. a credit of $7,000 to the Cost of Goods Sold C. a credit of $7,000 to the Manufacturing Overhead account D. a credit of $2,000 to the Manufacturing Overhead account 3. Which of the following costs would not be included as part of manufacturing overhead? A. Depreciation of production equipment. B. Lubricants for production equipment. C. Factory supervisor's salary. D. Insurance on sales vehicles

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