Blue Ridge Mountain Manufacturing had the following transactions related to manufacturing overhead for the year:
1. Incurred manufacturing overhead costs
a. $5,000 in indirect materials
b. $12,500 in indirect labor (credit Wages Payable)
c. $30,600 in machinery depreciation
d. $20,400 in other indirect costs that were paid in cash
2. Allocated manufacturing overhead (use a compound entry)
a. $30,000 to the Mixing Department
b. $37,000 to the Packaging Department
Requirements
1. Prepare the journal entries for Blue Ridge Mountain Manufacturing.
2. Determine the amount of over allocated or under allocated manufacturing overhead by posting the transactions to the Manufacturing Overhead account. Assume the balance in Manufacturing Overhead on January 1 is $0. Prepare the adjusting entry?