The West Shore Furniture Company uses normal job order costing in its only

production department. Overhead is applied to jobs by a predetermined

rate, which is based on direct labor hours. The company began business on

December $1,2021.$ The only job started into process during December was

Job $1001.$ During December, the company purchased direct materials with a

total cost of $$28,500,$ but $$5,750$ of these direct materials were used on Job

The company also charged a total of $$25,860$ in conversion costs

$($direct labor and applied overhead$)$ to Job $1001$ during December. Job $1001$

was NOT finished as of the end of December, and no other jobs were worked

on during the month. There was no underapplied or over$-$applied overhead

for December. The following transactions occurred during the year $2022.$

Estimated overhead for $2022$ is $$283,475.$ The estimated direct labor

hours for $2022$ total $83,375.$

Direct materials purchased during $2022$ cost a total of $$592,000.$

Direct materials were used on jobs during $2022$ as follows:

JOB $1001,$$$149,710$

JOB $1002,$$$247,696$

JOB $1003,$$$127,340$

During $2022,$ there were $25,700$ direct labor hours on Job $1001$; $38,210$

direct labor hours on Job $1002$; and $27,440$ direct labor hours on Job

The direct labor hours used during $2022$ had a rate of $$24$ per

hour.

Other costs incurred during $2022$ include the following:

Shipping Expense

Factory Depreciation $$28,900$

Miss $$103,000$

$ $5,525$Indirect Material $ $84,500$

Sales Commissions

$975,000$

Factory Small Tool and Equipment Repair Expense $$76,390$

Job $1001$ and $1002$ were completed during the year. Job $1001$

consisted of $10,000$ units, and Job $1002$ consisted of $15,000$ units.

$6000$ units of Job $1001$ was sold during $2022$ for $$250$ per unit. Also,

$10,000$ of the $15,000$ units on Job $1002$ were sold during $2022$ at a

price of $$150$ each.

TASKINGS:

A$.$ Compute the ending balance in Materials Inventory and Work in

Process Inventory as of December $31,2021.$

B$.$ Without preparing a schedule or making any computations, what is the

Cost of Goods Manufactured for December, $2021?$

C$.$ Compute the predetermined overhead rate for $2022.$

D$.$ Prepare, in good form, a fully complete Schedule of Cost of Goods

Manufactured for $2022.$

E$.$ Add together the total cost charged to Jobs $1001$ and $1002.$ Does the

answer equal the amount of Cost of Goods Manufactured that you got

in Part D$?$ Should it$?$

F$.$ Compute the underapplied or overapplied overhead for $2022.$

G$.$ Prepare, in good form, an income statement for $2022.$

H$.$ Now assume that you are to allocate $($prorate$)$ the underapplied or

overapplied overhead to the appropriate accounts. You should be able

to figure out how much applied overhead is in Work in Process $($just Job

$1003).$ You can assume that there is $$78,257$ of applied overhead in

Finished Goods. Based on the total applied overhead for the year, you

should now be able to figure out how much applied overhead should be

in Cost of Goods Sold. Do the proration and show your calculations.

I. If you were to prepare a new income statement, after prorating

underapplied or overapplied overhead, would income be higher or

lower than what you got in Part G$?$ By how much?