Recording Manufacturing Costs and Analyzing Manufacturing Overhead $[$LO $2-3,2-4,2-5]$

Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of the current year follow:

  

Required:

Set up T$-$accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts:

a$.$ Raw Materials Inventory.

b$.$ Work in Process Inventory.

c$.$ Finished Goods Inventory.

d$.$ Cost of Goods Sold.

e$.$ Manufacturing Overhead.

f$.$ Selling, General, and Administrative Expenses.

g$.$ Sales Revenue.

Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance.

Determine the amount of over$-$or underapplied overhead.

Compute adjusted gross profit assuming that any over$-$or underapplied overhead balance is adjusted directly to Cost of Goods Sold.

Complete this question by entering your answers.

Compute adjusted gross profit assuming that any over$-$ or underapplied overhead balance is adjusted directly to Cost of Goods Sold.