The unadjusted trial balance of Innovative Computers Pty Ltd on 30 June 2016 is presented below:

	INNOVATIVE COMPUTERS PTY LTD Unadjusted Trial Balance as at 30 June 2016
			Debit		Credit
	Cash at bank Trade debtors Finished goods inventory, 1/7/15 Work in process, 1/7/15 Raw materials inventory, 1/7/15 Prepaid insurance Machinery and equipment Accumulated depreciation – machinery and equipment Trade creditors Loan payable Share capital Retained earnings Sales Purchases – raw materials Direct labour Indirect labour Factory supplies Electricity Rent Insurance Rates and taxes Selling and distribution expenses Administrative and office expenses Sales commissions Interest expense		$	60000 85120 145000 80000 37500 12000 400000 1645000 420000 105000 140700 102250 180000 80600 37500 154500 210000 351360       9600		$	140000 83750 120000 300000 98780 3513600
			$	4256130		$	4256130

The following additional information is available:

1. The inventories as of 30 June 2016 were:

Raw materials Work in process Finished goods

$32000 82000 163750

2. The Machinery and Equipment account comprises $250000 of factory machinery and the balance of office equipment. All machinery and equipment is depreciated using the straight-line method over an 8-year life. There were no plant and equipment acquisitions or disposals during the accounting period.

3. On 1 May 2016, the company paid $12000 for 12 months insurance cover on the factory. Prepaid Insurance was debited at the time of the transaction.

4. Accrued expenses at year-end but not yet recorded: direct labour, $10000; indirect labour, $3500; selling and distribution expenses, $20000.

5. All electricity, rent, rates and taxes, and insurance are charged to factory operations.

6. An additional stationery expense payable of $1500 is to be recorded and treated as an administrative expense. No invoice has been received.

7. Ignore income tax.

Required

A. Prepare a worksheet including pairs of columns for unadjusted trial balance, adjustments, manufacturing, and the financial statements.

B. Prepare a cost of goods manufactured statement for the year ended 30 June 2016.

C. Prepare the closing entries assuming use of a Manufacturing Summary account.

D. Calculate the relationship between overhead and direct labour costs. Using that relationship, calculate the labour and overhead included in the ending inventories if work in process ending inventory contains $25 000 of raw materials and $38 000 of raw materials is included in the finished goods ending inventory.