The following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year.Requirements: Record the proper journal entry for each transaction.$205,000 of materials was purchased on account.$158,000 of materials was used in production; of this amount, $155,000 was used on specific jobs.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.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.$62,000 of manufacturing overhead was allocated to specific jobs.By the end of January, was manufacturing overhead overallocated or underallocated? By how much?

Manufacturing overhead cost is defined as the sum of all the indirect costs that are incurred while…

Answered: The following transactions were…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year.

Requirements: Record the proper journal entry for each transaction.

1. $205,000 of materials was purchased on account.
2. $158,000 of materials was used in production; of this amount, $155,000 was used on specific jobs.
3. 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.
4. 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.
5. $62,000 of manufacturing overhead was allocated to specific jobs.

By the end of January, was manufacturing overhead overallocated or underallocated? By how much?

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