The following transactions were incurred by Nunez Fabricators during January, the first month of its fiscal year.
Requirements
1. Record the proper journal entry for each transaction.
a. $200,000 of materials were purchased on account.
b. $162,000 of materials were used in production; of this amount, $161,000 was used on specific jobs.
c. Manufacturing labor and salaries for the month totaled $220,000. A total of $210,000 of manufacturing labor and salaries was traced to specific jobs, while the remainder was indirect labor used in the factory.
d. The company recorded $23,000 of depreciation on the plant and plant equipment.
The company also received a plant utility bill for $14,000.
e. $39,000 of manufacturing overhead was allocated to specific jobs.
f. Received bill for website services for $5,000.
2. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?