The following events occurred over the course of a year at BagbyCorp., which uses a job order costing system:

1. Direct materials purchases totaled $460,000.

2. $230,000 of indirect materials were used in production. Bagbyuses a separate Supplies Inventory account for indirectmaterials.

3. $415,000 of direct materials were used in production.

4. The direct labor payroll was $940,000 (credit WagesPayable).

5. Other manufacturing overhead costs incurred during the yeartotaled $540,000.

6. Bagby applies overhead based on a predetermined overhead rateof $15 per machine hour. The company used 50,000 machine hoursduring the year.

7. During the year, Bagby transferred goods costing $2,100,000into the Finished Goods Inventory account.

8. Bagby sold products with a manufacturing cost of $2,050,000to customers during the year.

Required

a. Prepare journal entries to record these events.

b. Prepare T-accounts for the following accounts: DirectMaterials Inventory, Work in Process Inventory, ManufacturingOverhead Control, and Finished Goods Inventory. Record thetransactions from part (a) in the T-accounts and calculate endingaccount balances. Assume the following beginning account balances:Account Balance Direct Materials Inventory $20,000 Work in ProcessInventory $12,000 Finished Goods Inventory $35,000

c. Was overhead under- or overapplied for the year? By howmuch?