Georgia Woods, Inc., manufactures furniture to customers' specifications and uses job order costing. A predetermined overhead rate is used in applying manufacturing overhead to individual jobs. In Department One, overhead is applied on the basis of machine-hours, and in Department Two, on the basis of direct labor hours. At the beginning of the current year, management made the following budget estimates to assist in determining the overhead application rate.

Dept 1Dept 2

Direct labor Cost$300,000$225,000

Direct labor hours2000015000

Overhead$420,000$337,500

Machine hours120007500

Production of a batch of custom furniture ordered by City Furniture (job no. 58) was started early in the year and completed three weeks later on January 29. The records for this job show the following cost information.

Dept 1Dept2

Direct materials cost$10,100$7,600

Direct labor cost16,50011,100

Direct labor hours1,100740

Machine hours750500

Direct labor hours ( Jan)16001,200

Machine hours (Jan)1,100600

Overhead(Jan)39,01026,540

Required:

1.prepare the entries required to record the sales (on account) for the furniture to the City Furniture. The sales price of the order was $147,000.

2.Determine the over or underapplied overhead for each department at the end of January