The following transactions were incurred by Dutch Fabricators during January, the first month of its fiscal year.
Requirements
1. Record the proper journal entry for each transaction.
a) $190, 000 of materials were purchased on account.
b) $ 174,000 of materials was used in production: of this amount, $152, 000 was used on specific jobs.
c) Manufacturing labor and salaries for the month totaled $ 225,000. A total of $ 190,000 of manufacturing labor and salaries was traced to specific jobs, while the remainder was indirect labor used in the factory.
d) The company recorded $20,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $ 10,000
e) $81,000 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?