overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $$1,400,000$ and total direct labor cost of $$2,800,000.$ The following events occurred during August:

$($Click the icon to view the events.$)$

Read the requirements.

Requirement $1.$ Calculate Superior's predetermined overhead allocation rate for the year.

Predetermined overhead

allocation rate

$=$

$=$

$\%$

Requirement $2.$ Prepare journal entries to record the events in the general journal. $($Record debits first, then credits. Exclude

a$.$ Purchased materials on account, $$430,000.$

b$.$ Requisitioned direct materials and used direct labor in construction. Record the materials requisitioned.

Requirements

Calculate Superior's predetermined overhead allocation rate for the year.

Prepare journal entries to record the events in the general journal.

T$-$accounts for Work$-$in$-$Process Inventory and Finished Goods Inventory have

been opened for you. Post the appropriate entries to these accounts,

identifying each entry by letter. Determine the ending account balances,

assuming that the beginning balances were zero.

Add the costs of the unfinished houses, and show that this total amount equals

the ending balance in the Work$-$in$-$Process Inventory account.

Add the costs of the completed house that has not yet been sold, and show

that this equals the ending balance in Finished Goods Inventory.

Compute gross profit on the house that was sold. What costs must gross profit

cover for Superior Construction?P

overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $$1,400,000$ and total direct labor cost of $$2,800,000.$ The following events occurred during August:

$($Click the icon to view the events.$)$

Read the requirements.

f$.$ Allocated overhead to jobs.

More info

a$.$ Purchased materials on account, $$430,000$

b$.$ Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned.

c$.$ The company incurred total wages of $$270,000.$ Use the data from Item $b$ to assign the wages. Wages are not yet paid.

d$.$ Depreciation of construction equipment, $$6,900$

e$.$ Other overhead costs incurred: Equipment rentals paid in cash, $$39,000$; Worker liability insurance expired, $$7,000.$

f$.$ Allocated overhead to jobs.

g$.$ Houses completed: $402,404$

h$.$ House sold on account: $404$ for $$230,000$

Requirements

Calculate Superior's predetermined overhead allocation rate for the year.

Prepare journal entries to record the events in the general journal.

T$-$accounts for Work$-$in$-$Process Inventory and Finished Goods Inventory have

been opened for you. Post the appropriate entries to these accounts,

identifying each entry by letter. Determine the ending account balances,

assuming that the beginning balances were zero.

Add the costs of the unfinished houses, and show that this total amount equals

the ending balance in the Work$-$in$-$Process Inventory account.

Add the costs of the completed house that has not yet been sold, and show

that this equals the ending balance in Finished Goods Inventory.

Compute gross profit on the house that was sold. What costs must gross profit

cover for Superior Construction?