Austin Mcknight joined Walker Enterprises as controller in October 2016. i (Click the icon for additional information about Walker Enterprises.) Mcknight is eager to impress his new employer, and he knows that in 2017, Walker's upper management is under pressure to show a profit in a challenging competitive environment because they are hoping to be acquired by a large private equity firm sometime in 2018. At the end of 2016, Mcknight decides to adjust the manufacturing overhead rate to 180% of direct labor cost. He explains to the company president that, because overhead was underallocated in 2016, this adjustment is necessary. Cost information for 2017 follows: (Click the icon to view the cost information for 2017.) Walker's revenue for 2017 was $5,026,000, and the company's selling and administrative expenses were $2,358,000 Read the requirements Requirement 1. Insert the given information in the T-accounts below. Calculate the following amounts to complete the T-accounts: (a) Diret material control 17/01/0017 ( Mouse baad allocated 2017 da Coat of asadosald, 2017. (Abbreviations used: COGM = cost of goods manufactured, COGS = cost of goods sold, Dir = direct, Dir. Matls = direct materials, MOH = manufacturing overhead, and OH = overhead.) Direct Work-in-Process Requirements Materials Control Control Data table Bal. 1/1/2017 20000 Dir. Matls used 590000 Bal. 1/1/2017 230000 COGM 2961290 1. Insert the given information in the T-accounts provided. Calculate the following Dir Matls, purch 600000 Dir. Labor used 855000 amounts to complete the T-accounts: a. Direct materials control, 12/31/2017 Direct materials control. 1/1/2017 20.000 Dir. Matls used 600000 b. Manufacturing overhead allocated, 2017 Direct materials purchased, 2017 600,000 OH Alloc. 1624500 c. Cost of goods sold, 2017 Direct materials added to production, 2017 590,000 Bal. 620000 Bal 590000 Bal. 3309500 Bal. 2961290 2. Calculate the amount of under-or overallocated manufacturing overhead. 230,000 3. Calculate Walker's net operating income under the following: Work in process control, 1/1/2017 855,000 a. Under- or overallocated manufacturing overhead is written off to cost of Direct manufacturing labor, 2017 Finished Goods Manufacturing goods sold. Cost of goods manufactured, 2017 2,961,290 Control OH Control b. Under- or overallocated manufacturing overhead is prorated based on the 201,000 Finished goods control, 1/1/2017 201000 Bal. 1/1/2017 ending balances in work in process, finished goods, and cost of goods sold. COGS MOH costs 1350000 4. Mcknight chooses option 3a above, stating that the amount is immaterial. Finished goods control, 12/31/2017 324,425 2961290 Comment on the ethical implications of his choice. Do you think that there Manufacturing overhead costs, 2017 1,350.000 Bal. 3162290 were any ethical issues when he established the manufacturing overhead rate Bal Bal. 1350000 Bal for 2017 back in late 2016? Refer to the IMA Statement of Ethical Professional Practice COGM Manufacturing OH Allocated Print Cost of Goods Sold Done Print Done Bal Bal. Bal. Bal