1. Majestic Corporation is a manufacturer that uses job order costing.

The company applies overhead cost to jobs on the basis of machine hours worked. For the current year, the companys predetermined overhead rate was based on a cost formula that estimated $520,000 of total manufacturing overhead for an estimated activity level of 80,000 machine hours.

Record the applicable journal entries for each of the following transactions that occurred during the year.

1. Raw materials were used in production: $100,000 ($60,000 direct materials and $40,000 indirect materials).
2. Utility costs (on account) in the factory were $32,000.
3. Manufacturing was applied to production. The company worked 83,000 machine hours on all jobs during the year.
4. Jobs costing $175,000, according to their job cost sheets were completed during the year.