Yu Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. Yu uses job order costing and has a perpetual inventory system. The business has a highly labour intensive production process, so it applies manufacturing overhead to jobs based on direct labour cost. Yu expects to incur $1,080,000 of manufacturing overhead costs and estimated direct labour costs of $900,000 during 2015. At the end of March 2015, Yu Technology reported work in process inventory of $15,000 During April 2015, Yu Technology recorded the following transactions. ) Materials requisitioned for use in production: Direct materials: $120,000 Indirect materials: $20,000 2) Advertising costs were i 3) Salaries and wages incurred as follows: ncurred, $15,00o Direct labour Indirect labour Selling and administrative salaries $121,875 s 40,625 25,000 4) Insurance expired during the year, $30,000 (90% relates to the factory, the remainder is on selling and administrative items). Depreciation recorded for the year, $80,000 (75% relates to factory assets and the remainder relates to selling and administrative assets). 5) 6) Utilities expense incurred, $53,750 (80% of this amount relates to the factory, the remainder relates to the administrative offices). 7) Applied manufacturing overhead costs to jobs 8) Two jobs were completed with total costs of $120,0oo& $85,ooo respectively. They were sold on account at a mark-up of 75% on cost. All purchases and services were acquired on account. Required: (a) Compute Yu Technology predetermined manufacturing overhead rate for 2015. (b) State the journal entries necessary to record the above transactions in the general journal. (c) Is manufacturing overhead over-applied or under-applied? By how much? (d) Record a journal entry to close manufacturing overhead to cost of goods sold. (e) Prepare an income statement for the year (1) Determine the balance in work in process inventory on April 30