Scholastic Brass Corporation manufactures brass musical Instruments for use by high school students. The company uses a normal costing system, in which manufacturing overhead is applied on the basis of direct-labor hours. The company’s budget for the current year included the following predictions.

Budgeted total manufacturing overhead ……………………………………….......…    $426,300

Budgeted total direct-labor hours (based on practical capacity) 2………..……….     0,300

During March, the firm worked on the following two production jobs:

Job number T81, consisting of 76

Job number C40, consisting of 110 cornets

The events of March are described as fo1lows:

a. One thousand square feet of rolled brass sheet metal were purchased on account for $5 .000.

b. Four hundred pounds of brass tubing were purchased on account for $4,000.

c. The following requisitions were submitted on March 5:

Requisition number 112: 250 square feet of brass sheet metal at $5 per square root (for job number T81)

Requisition number 113: 1.000 pounds of brass tubing, at $10 per pound (for job number C40)

Requisition number 114:10 gallons of valve lubricant, at $10 per gallon

All brass used iii production is treated as direct material. Valve lubricant is an indirect material.

d. Aim analysis of labor time cards revealed the following labor usage for March. 

Direct labor: Job number 181, 800 hours at $20 per hour

Direct labor: Job number C40, 900 hours at $20 per hour

Indirect labor: General factory cIeani4, $4,000

Indirect labor: Factory supervisory salaries, $9,000

e. Depreciation of the factory building and equipment during March amounted to $1 2.000.

f. Rent paid in cash for warehouse space used during March was $1,200.

g. Utility costs incurred during March amounted to $2,100. The invoices for these costs were received, but the bills were not paid in March.

h. March property taxes on the factory were paid in cash, $2,400.

i. The insurance cost covering factory operations for the month of March was $3,100. The insurance policy had been prepaid.

j. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during March amounted to $8,000.

k. Depreciation on administrative office equipment and space amount to $4,000.

l. Other selling and administrative expenses paid in cash during March amounted to $1.000.

m. Job number T81 was completed on March 20.

n. Half of the trombones in job number T81 were sold on account during March for $700 each.

The March 1 balances in selected accounts are as follows:

Cash ………………………………………….………………................         $ 10,000

Accounts Receivable ………………………………………….........          21,000

Prepaid Insurance ………………………...……………….….......…           5,000

Raw-Material Inventory ……………………...……........……..           149,000

Manufacturing supplies Inventory ……………………........…..            500

Work-in-Process Inventory ……………………………….....….            91,000

Finished-Goods Inventory …………………………………......           220,000

Accumulated Depreciation: Buildings and Equipment ....… 102,000

Accounts Payable …………………………………………...............          13,000

Wages Payable ………………………………………………...................      8,000

Required:

1. Calculate the company’s predetermined overhead rate for the year.

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made in requirement (2).

4. Calculate the over applied or under applied overhead for March. Prepare a journal entry to close this balance into Cost of Goods Sold.

5. Prepare a schedule of cost of goods manufactured for Match.

6. Prepare a schedule of cost of goods sold for Match.

7. Prepare an income statement for March.