Question - The following transactions relate to Malone Custom Furniture Manufacturing's past month:
1. Incurred manufacturing wages of $30,000, 60% of which was direct labor and 40% of which was indirect labor.
2. Used in production: direct materials, $12,000; indirect materials,$5,500.
3. Allocated manufacturing overhead to jobs, 150% of direct labor costs.
4. Completed production on jobs with costs of $55,000.
5. Sold inventory on account, $64,000; cost of goods sold, $35,000.
Required -
a. Record the journal entries for each of the transactions.
b. Assume that actual manufacturing overhead costs were $25,000. Record the journal entry to adjust for underallocated/overallocated overhead.