The following data were taken from the records of Cougar Enterprises, a Canadian manufacturer that uses a normal job-order costing system:

During December, the company worked on jobs numbered 70 through 90 and incurred the following costs:

Additional information:
1. Total overhead costs are applied to jobs on the basis of direct labour hours worked. At the beginning of the year, the company estimated that total overhead costs for the year would be $150,000, and the total labour hours worked would be 12,500.
2. The balance in the Departmental Overhead Control account on December 1 was $160,010. Actual direct labour hours for the previous 11 months (January through November) were 11,250.
3. There were no jobs in finished goods on December 1.
4. Expenses for December were as follows (not yet recorded in the books of account):

5. The company writes off all under-or over-applied overhead to Cost of Goods Sold at the end of the year.
6. Jobs numbered 70, 80, 85, and 90 were completed during December. Only Job 90 remained in finished goods on December 31.
7. The company charges its customers 250% of total manufacturing cost.
8. Cost of goods sold to December 1 was $358,750.
Instructions
(a) Using the information given, calculate the following amounts:
1. The predetermined overhead rate used to apply overhead to products
2. The cost of ending work in process inventory
3. The cost of goods manufactured in December
4. The unadjusted gross margin for December
(b) Prepare the summary journal entries to the control accounts required to record all the transactions for December that relate to production.
(c) Calculate the under- or over-applied overhead for the year. What effect would this amount have on net income?

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Work in Process, December1 ob Number Direct materials Direct labour Applied overhead Total 70 $1,800 1,200 75 $2,400 2,400 1,350 $6,150 80 $1,500 600 450 $2,550 600 $3,600 Job Number Direct materials Direct labour Direct labour hours 70 $600 $750 75 900 $3,000 Total $ 5,550 $13,500 80 85 $1,350 $2,250 90 $1,500 $6,000 $1,200 $1,500 50 100 200 150 400 900 Direct materials purchased Salaries $ 7,500 Production clerk Supervisor Depreciation (plant and equipment) Factory supplies Sales staff salaries Utilities (factory) Administrative expenses 1,500 2,200 2,490 1,500 9,200 1,800 9,500 $35,690