BEGINNING BALANCES FOR 2020			Total cost
Work in process inventory			161,000
Finished goods inventory			-
JOB STATUS IN 2020			Home #1	Home #2	Home #3
Status at beginning of year			In process	Not started	Not started
Status at end of year			Sold	Sold	In process
COSTS TRACED TO JOBS IN 2020			Home #1	Home #2	Home #3
Direct materials costs			$ 300,000	$ 140,000	$ 25,000
Direct labor costs			$ 220,000	$ 90,000	$ 15,000
LABOR HOURS IN 2020			Home #1	Home #2	Home #3
Number of direct labor hours			11,000	5,000	600

Manufacturing overhead: MNO Co. allocates its manufacturing overhead to its jobs based on the number of labor hours used. MNO Co.'s budgeted manufacturing overhead has been the same since the company commenced operations in 2019. At the end of each year, any under- or over-applied manufacturing overhead is allocated to the cost of goods sold account.

Details about each home: Home #1 was started in 2019, and was the only home in process at the beginning of 2020. Home #1 used a total of 3,000 direct labor hours in 2019. In 2019, direct materials costs totaling $80,000 and direct labor costs totaling $60,000 were traced to Home #1. Home #1 was finished and sold in 2020. Home #2 was started, finished, and sold in 2020.

2a. What is the firm's budgeted manufacturing overhead rate per labor hour for 2020? HINT: Calculate how much manufacturing overhead was in the beginning cost for Home #1 and then use that amount to divide by the cost driver that was in for Home #1 at the beginning of the year.

2b. What is the amount of cost of goods sold for 2020, before making any necessary adjustment for under- or over-applied overhead? HINT: That is, calculate the total costs of the homes that were sold. Don't forget to include any amount in beginning inventory for those homes.

2c. What is the amount of cost of goods sold for 2020, after making any necessary adjustment for under- or over-applied overhead? HINT: First compute the amount of under- or over-applied overhead and figure out how to adjust that account.