WB Company produces a sturdy workbench. WB uses a normal-costing system and allocates overhead at a rate of $5 per machine-hour. The following data reflect activity for the year 2020:

WB Company produces a sturdy workbench. WB uses a normal-costing system and allocates overhead at a rate of $5 per machine-hour. The following data reflect activity for the year 2020: Costs items: 1. Purchases of direct materials on credit 2. Direct manufacturing labor 3. Direct materials used 4. Indirect labor 5. Depreciation, factory equipment 6. Rent, factory 7. Manufacturing overhead allocated: 42,000 actual machine-hours used 8. Cost of goods manufactured (000) $100 150 110 60 80 75 ? 485 Beginning Inventory Balances: Jan. 1, 2020 Materials Control Work-In-Process Control Finished Goods Control $20 35 100 Required (show your work): 1. Prepare journal entries for items 1-8. (8 points) 2. Is MOH under- or over-allocated? By how much? (4 points) 3. Prepare the journal entry to close out over- or under-allocated overhead to COGS. (4 points) 4. Calculate the ending balance of the Work-In-Process Control. (4 points) 5. WB Company is diversifying its product line and increasing the sophistication of its manufacturing processes. (i) Explain what product costing problem might arise if the company continues using a traditional, plantwide allocation method, given these changes. (ii) Describe two examples of managerial decisions affected by this problem be specific. (5 points)