Problem $5-30$: Comprehensive Problem $$ Journal Entries, T$-$Accounts, Financial Statements

Background:

Oil Field Equipment Company is a small company that manufactures specialty heavy equipment for use in Alberta oil fields. The company uses a job$-$order costing system and applies manufacturing overhead cost to jobs based on the direct labor$-$hours. At the beginning of the current year, the company estimated the following amounts to compute the predetermined overhead rate:

Estimated manufacturing overhead cost: $$360,000$

Estimated direct labor$-$hours: $900$ hours

Throughout the year, the following transactions took place $($all purchases and services were acquired on account$)$:

Transactions:

a$.$ Raw materials were purchased for use in production: $$200,000$

b$.$ Raw materials were requisitioned for use in production $($all direct materials$)$: $$185,000$

c$.$ Utility bills were incurred in the factory: $$70,000(90\%$ related to factory operations and the remaining related to administrative activities$)$

d$.$ Costs for salaries and wages were incurred as follows:

Direct labor $(975$ hours$)$: $$230,000$

Indirect labor: $$90,000$

Selling and administrative salaries: $$110,000$

e$.$ Maintenance costs were incurred in the factory: $$54,000$

f$.$ Advertising costs were incurred: $$136,000$

g$.$ Depreciation was recorded for the year: $$95,000(80\%$ related to factory assets, the remainder related to selling and administrative equipment$)$

h$.$ Rental cost was incurred on buildings: $$120,000(85\%$ related to factory, remainder to selling and administration facilities$)$

i$.$ Manufacturing overhead cost was applied to jobs at the predetermined rate.

j$.$ Cost of goods manufactured for the year was $$770,000$

k$.$ Sales for the year $($all on account$)$ totaled $$1,200,000.$ These goods cost $$800,000$ according to their job cost sheets.

Beginning Balances in Inventory Accounts:

Raw Materials: $$30,000$

Work in Process: $$21,000$

Finished Goods: $$60,000$

Requirements:

Prepare journal entries to record the above transactions.

Post your entries to T$-$accounts, including the opening inventory balances, and determine the ending balances in the inventory accounts and in the Manufacturing Overhead account.

Prepare a Schedule of Cost of Goods Manufactured for the year.

Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account.

Prepare a Schedule of Cost of Goods Sold for the year.

Prepare an income statement for the year.

Analyze Job $412,$ which was completed during the year, to calculate the cost per unit and price charged to the customer. The job required $$8,000$ in direct materials and $39$ hours of direct labor at a total direct labor cost of $$2,900.$ Manufacturing overhead was applied based on direct labor hours, and only $4$ units were produced for this job. If the company billed at a price of $60\%$ above the unit product cost, what price per unit would have been charged to the customer?