Answer:
3. 
DR Selling and Administrative Salaries               $240,000
       Manufacturing Overhead                                $150,000
       Work in Process                                                $600,000
CR Wages Payable                                                                      $990,000
4. 
Manufacturing Overhead Applied 
= 41,000 hours * 16.25 
= $666,250
5. Total Manufacturing cost to be added = Raw Materials + Direct Labor + Manufacturing Overhead 
= 480,000 + 600,000 + 666,250
= $1,746,250
6. 
DR Finished Goods                                             $1,680,000
CR Work in Process                                                                $1,680,000
7. 
Ending Balance = Beginning balance + Raw materials + Direct labor + Manufacturing Overhead - Cost transferred to Finished goods
= 18,000 + 480,000 + 666,250 + 84,250 - 1,680,000
= $84,250
9. Predetermined overhead cost - Actual cost = 666,250 - 650,000 = $16,250. 
<u>Overapplied</u> as predetermined cost was more than Actual.
12. Finished goods = Beginning balance + Cost transferred from WIP - Cost of goods sold
= 35,000 + 1,680,000 - 1,690,000
= $25,000
13. 
Adjusted Cost of Goods sold = Cost of goods sold - Overapplied
= 1,690,000 - 16,250
= $1,673,750
14. Gross Margin = Sales - Adjusted COGS
= 2,800,000 - 1,673,750
= $1,126,350
15. Net Operating Income
= Gross Margin - Selling and Administrative salaries - Selling and Administrative expenses 
= 1,126,350 - 240,000 - 367,000
= $519,250