Journal entries of Job Order Costing - 19 minutes Bold Baking Co. makes all types of baked goods, including pies, scones and cakes. The Company uses job order costing to allocate its manufacturing overhead costs. The Company applies overhead on the basis of direct labour hours. Best Bakery expects manufacturing overhead to be $170,000 and its bakers to work 20,000 hours. The following transactions occurred in the year: a) Purchased raw materials of $315,000 on account b) Requisitioned $300,000 of raw materials into production (90% direct materials, 10% indirect materials) c) Advertised in local newspaper for $7,000 d) incurred the following employee costs: Direct labour: $550,000 Indirect labour: 70,000 Administrative salaries: 150,000 e) Received property taxes notice of $50,000 (70% relates to the kitchen, 30% relates to the office) Depreciation of $80,000 (80% relates to the kitchen, 20% relates to the office) g) Manufacturing overhead costs were applied to production. The bakers actually worked 22,000 hours Required: a) For transactions a- g above, record the adjusting journal entries. Assume all transactions were on account b) Was overhead over or underapplied and by how much? C) Record the journal entry to close manufacturing overhead to cost of goods sold