Lally, Inc., produces universal remote controls. Lally uses a JIT costing system. One of the companys products has a standard direct materials cost of $7 per unit and a standard conversion cost of $26 per unit. During January 2011, Lally produced 575 units and sold 570. It purchased $6,800 of direct materials and incurred actual conversion costs totaling $14,000. Requirements R1. Prepare summary journal entries for January. R2. The January 1, 2011, balance of the Raw and in-process inventory account was $40. Use a T-account to find the January 31 balance. R3. Use a T-account to determine whether Conversion costs are over- or underallocated for the month. By how much? Give the journal entry to close the Conversion costs account.