Watson Manufacturing Company employs a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:

\begin{array}{l}\text { 1. Direct materials requisitioned during the month: }\\\begin{array} { l r } \text { Job } 101 & \$ 20,000 \\\text { Job } 102 & 16,000 \\\text { Job } 103 & 24,000 \\&\$60,000\end{array}\end{array}

\begin{array}{l}\text { 2. Direct labor incurred and charged to jobs during the month was: }\\\begin{array} { r r } \text { Job } 101 & \$ 32,000 \\\text { Job } 102 & 28,000 \\\text { Job } 103 & 20,000 \\ & \$ 80,000\end{array}\end{array}

3. Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 75% of direct labor costs.
4. Actual manufacturing overhead costs incurred during the month amounted to $66000.
5. Job 101 consisting of 1000 units and Job 103 consisting of 200 units were completed during the month.
Instructions
(a) Prepare journal entries to record the above transactions.
(b) Answer the following questions:
1. How much manufacturing overhead was applied to Job 103 during the month?
2. Compute the unit cost of Jobs 101 and 103.
3. What is the balance in Work In Process Inventory at the end of the month?
4. Determine if manufacturing overhead was under- or overapplied during the month. How much?

Jinnah Company Applies Overhead on the Basis of 200% of Direct

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