Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month Job J57 and Job K52 involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Raw materials were requisitioned from the company's inventory on December 2 for $5,100; on December 8 for $1,053; and on December 14 for $3,450. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $17 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K 52 The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,131 hours, and the anticipated overhead costs are $852,400 for the year. The machines were used by workers on projects K52 and J57 on December 3,9, and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours were used for project J57 (2.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for 357 and 100 sprinkler heads for K52. Additional job order activities during this period included: Dec. 1 Purchased raw materials from Durbin Supply Company on account for $52,800. Dec. 2 Issued $39,800 of direct materials from the company's inventory to jobs other than K 52 and J57 and $3,000 of indirect materials. Dec 12 Paid Waterways' factory salaries and wages for $65,500. Dec 13 Paid the factory's water bill of $9,100. Doc 18 Transferred $50,100 of costs from other completed jobs to finished goods. Dec 21 Paid the factory's selectric bill of $12,100 for Waterways' factory. Dec. 31 Made adjusting entries forth factory that included accrued property taxes of $12.100, prepaid insurance of $8,700, and accumulated depreciation of $15,900. Assuming that Manufacturing Overhead has a debit balance of $3,600, determine whether overhead has been under/over applied and make the adjusting entry. (Credit account titles are automotically indented when amount is entered. Do not indent manually.)
