2 O'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at constructilon sites. It only bulds to order (each unit Is bullt to customer specifications). O'Leary uses a normal job costing system. Direct labor at O'Leary Is pald $26 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 (adjusted for price-level changes using current prices and wage rates) as follows. Skipped Year 1 Year 2 Direct labor-hours worked 68, 8ee 55, 800 Manufacturing overhead costs incurred Indirect labor Employee benefits Supplies Рower $2,832,000 1,832, 00 688,00e 645,000 $2,232,000 837, eee 558, 000 540, 000 Heat and light Supervision Depreciation 141,600 141,600 781,470 661,650 2,036,50e 787,430 2,036, 500 Property taxes and insurance se5, 250 Total manufacturing overhead costs $8,944,00e $7,812,000 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 prevlous year's actual overhead rate. Data on direct materlal costs and direct labor- hours for these Jobs In year 2 follow. Job MC-270 Job MC-275 Direct material costs Direct labor-hours $496, 80e 3, 290 hours $271,8ee 2,590 hours During year 3, O'Leary Incurred the following direct materlal costs and direct labor-hours for all jobs worked In year 3, Including the completion of Job MC-275. $11,841, 800 75,800 $ 9,552, e0e Direct material costs Direct labor-hours Actual manufacturing overhead At the end of year 3, there were four Jobs that had not yet shlpped. Data on these Jobs follow. MC- 389 MC -398 MC-397 MC - 399 Direct materials $45, e00 1,758 hours $68, 800 2,790 hours $105, 300 6,190 hours $30,780 1,390 hours In progress Direct labor-hours Job status Finished Finished In progress