The following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year.
Requirements
1. Record the proper journal entry for each transaction.
a. $205,000 of materials was purchased on account.
b. $158,000 of materials was used in production; of this amount, $155,000 was used on specific jobs.
c. Manufacturing labor and salaries for the month totaled $250,000. $215,000 of the total manufacturing labor and salaries was traced to specific jobs, and the remainder was indirect labor used in the factory.
d. The company recorded $19,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $10,000 which will be paid at a later date.
e. $62,000 of manufacturing overhead was allocated to specific jobs.
2. By the end of January, was manufacturing overhead over-allocated or under-allocated? By how much?