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CoursHeroTranscribedText: O'leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O'leary uses a normal job costing system. Direct labor at O'leary Is paid $30 per hour, but the employees are not pald if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years or price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,608 56,680 Manufacturing overhead costs incurred Indirect labor $2, 864, 090 $2, 264, 080 Employee benefits 1, 944, 090 849, 080 Supplies 696, 908 566, 909 Power 653, 090 548, 090 Heat and light 143, 208 143, 280 Supervision 783, 790 664, 050 Depreciation 2, 060, 508 ,060, 580 Property taxes and insurance 803, 510 829, 250 Total manufacturing overhead costs $9, 848, 090 $7,924, 080 At the beginning of year 3, O'leary has two jobs, which have not yet been delivered to customers. Job MC-270 was completed on December 27, year 2. It is scheduled to ship on January 7, year 3. Job MC-275 Is still In progress. For the purpose of computing the predetermined overhead rate, O'leary uses the previous year's actual overhead rate. Data on direct material costs and direct labor- hours for these Jobs In year 2 follow. Job MC- 279 Job MC- 275 Direct material costs $272, 608 $497 , 600 Direct labor-hours 2, 630 hours 3,330 hours During year 3, O'leary Incurred the following direct material costs and direct labor-hours for all jobs worked in year 3, Including the completion of Job MC-275 Direct material costs $11, 842, 690 Direct labor-hours 76,609 Actual manufacturing overhead $ 9,744, 809 At the end of year 3, there were four jobs that had not yet shipped. Data on these Jobs follow. MC - 389 MC -398 MC - 397 MC - 399 Direct materials $45,809 $69, 680 $106, 106 $31,580 Direct labor-hours 1, 766 hours 2,830 hours 6,230 hours 1, 430 hours Job status Finished Finished In progress In progress Required: a. What was the amount in the beginning Finished Goods and beginning Work-In-Process accounts for year 3? b. O'leary Incurred direct materials costs of $59,600 and used an additional 560 hours In year 3 to complete job MC-275. What was the final (total) cost charged to job MC-275? c. What was over- or underapplied overhead for year 3? d. O'leary prorates any over- or underapplied overhead to Cost of Goods Sold, Finished Goods Inventory, and Work-In-Process Inventory. Prepare the journal entry to prorate the over- or underapplied overhead. e. A customer has asked O'leary to bid on a job to be completed in year 4. O'leary estimates that the job will require about $93,800 In direct materials and 5,130 direct labor-hours. Because of the economy, O'leary expects demand for its services to be low In year 4

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