WinterTierCompany uses a job order cost system and applies overhead to production on thebasis of direct labor costs. On January 1, 2022, Job No. 120 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 119 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account. During themonth of January, WinterTier Company began production on Jobs 121 and 122, and completedJobs 120 and 121. Jobs 119 and 120 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred duringthe month.❖Purchased additional raw materials of $90,000 on account. ❖Incurred factory labor costs of $70,000. of this amount $16,000 related to employer payroll taxes. ❖Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $19,000; and various other manufacturing overhead costs on account $16,000. ❖Assigned direct materials and direct labor to jobs as follows.
Job NumberDirect MaterialsDirect Labour120$10,000$5,000121$39,000$25,000122$30,000$20,000(a) Calculate the predetermined overhead rate for 2022, assuming WinterTierCompany estimates total manufacturing overhead costs of $980,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. (3 Marks)(b) Open job cost sheets for Jobs 120, 121, and 122. Enter the January 1 balances on the job cost sheet for Job No. 120. (3Marks)(c) Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.(5 Marks)(d) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary. (3 Marks)(e) Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month. (6 Marks)(f) Prepare the journal entry (or entries)to record the sale of any job(s) during the month. (4 Marks)(g) What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of? (4Marks)