A firm produces its products by a continuous process involving three production departments, 1 through 3. Present entries to record the following selected transactions related to production during August: Materials purchased on account, $120,000. Material requisitioned for use in Department 1, $125, 700, of which $124, 200 entered directly into the product. Labor cost incurred in Department 1, $195, 400, of which $174,000 was used directly in the manufacture of the product. Factory overhead costs for Department 1 incurred on account. $54, 700. Depreciation on machinery in Department 1, $29, 200. Expiration of prepaid insurance chargeable to Department 1, $7,000. Factory overhead applied to production, $106, 300. Output of Department 1 transferred to Department 2, $362, 700