Audio Components recently installed a backflush costing system. One department makes 10 cm speakers with a standard cost as follows:

Materials ...................................$ 9.60
Conversion costs ........................5.40
Total .........................................$15.00

Speakers are scheduled for production only after orders are received, and products are shipped to customers immediately on completion. 

Therefore, no finished goods inventories are kept, and product costs are applied directly to cost of goods sold.
In October, 1,600 speakers were produced and shipped to customers. Materials were purchased at a cost of $16,200, and actual conversion costs (labour plus manufacturing overhead) of $6,800 were recorded.

1. Prepare journal entries to record October’s costs for the production of 10 cm speakers.

2. Suppose October’s actual conversion costs had been $6,000 instead of $6,800. Prepare a journal entry to recognize over applied conversion costs.