Problem - Cool Cooking Tools Ltd, manufacturer of gourmet cooking utensils, uses job costing. Manufacturing overhead is applied to production at a predetermined overhead rate of 150 per cent of direct labour cost. Any overapplied or underapplied manufacturing overhead is closed to cost of goods sold at the end of each month. Additional information:

Job SR22, consisting of ceramic spoon rests, was the only job in process on 31 January, with accumulated costs as follows:

Direct material                                      $4000

Direct labour                                         2000

Applied manufacturing overhead             3000

Total                                                    $9000

Jobs BS67, TR29 and GT108 were started during February.

Direct materials requisitions during February totalled $26 000.

Direct labour cost of $20 000 was incurred during February.

Manufacturing overhead incurred in February was $32 000.

The only job still in process on 28 February was job number GT108, with costs of $2800 for direct material and $1800 for direct labour.

Required:

1. Calculate the cost of goods manufactured for February.

2. Calculate the amount of overapplied or underapplied overhead to be closed to cost of goods sold on 28 February.

3. Prepare journal entries to record the events described in requirements 1 and 2.