(Journal entries) Banff Ltd. applies overhead at the rate of $15 per direct labor hour. The following transactions occurred during May 1997: 1. Direct material issued to production, $150,000. 2. Direct labor cost paid, 24,900 hours at $16 per hour. 3. Indirect labor cost accrued, 7,500 hours at $9 per hour. 4. Depreciation on factory assets recorded, $37,200. 5. Supervisors’ salaries paid, $15,000. 6. Indirect materials issued to production, $9,000. 7. Goods costing $375,000 were completed and transferred to finished goods.

a. Prepare journal entries for the above transactions using a single overhead account and assuming the Raw Materials Inventory account contains only direct materials.

b. If Work in Process Inventory had a beginning balance of $55,620, what is the ending balance?

c. Was overhead underapplied or overapplied for the month? By how much?

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