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Mooresville Corporation manufactures reproductions of eighteenth-century, classical-style furniture. It uses a job costing system that

applies factory overhead on the basis of direct labor hours Budgeted factory overhead for the year was $1.375.600, and management budgeted 90,500 direct labor hours. Mooresville had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of August. These transactions were recorded during August:

a. Purchased 5,700 square feet of oak on account at $26 per square foot.

b. Purchased 120 gallons of glue on account at $36 per gallon (indirect material).

c. Requisitioned 3,990 square feet of oak and 38 gallons of glue for production

d. Incurred and paid payroll costs of $202 600. Of this amount, $53,000 were indirect labor costs: direct labor personnel earned 22.

per hour.

e. Paid factory utility bill, $16,420 in cash.

f. August's insurance cost for the manufacturing property and equipment was $3,850. The premium had been paid in March.

g. Incurred $8,955 depreciation on manufacturing equipment for August

h. Recorded $2,575 depreciation on an administrative asset.

I. Paid advertising expenses in cash, $5,815.

j.incurred and paid other factory overhead costs. $14,200

k. Incurred miscellaneous selling and administrative expenses. $13,775

L. Applied factory overhead to production on the basis of direct labor hours

m. Produced completed goods costing $149,500 during the month.

n. sales on account in August were 139,200. The cost of Goods Sold was $115500

Required:

4. Prepare a schedule of Cost of Goods Manufactured and Cost of Goods Sold

5. Compute the amount of overapplied or underapplied overhead that should be prorated to Work-in-Process, Finished Goods and Cost of Goods Sold.

6. Prepare the income statement for August.

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