Donald Transport assembles prestige manufactured homes. Its job costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $31 per machine-hour in 2014). The following data (in millions) show operation costs for 2014:
1. Prepare an overview diagram of Donald Transport’s job-costing system.
2. Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. What is the ending balance of Work-in-Process Control?
3. Show the journal entry for disposing of under- or over allocated manufacturing overhead directly as a year-end write off to Cost of Goods Sold. Post the entry to T-accounts.
4. How did Donald Transport perform in 2014?
