The Temp makes electronic thermostats for homes and offices. The Orlando division makes one product, Auto therm, which has a standard cost of $33, consisting of $22 of materials and $11 of conversion costs. In January, actual purchases of materials totaled $235,000, labor payroll costs were $24,000, and manufacturing overhead was $76,000. Completed output was 10,000 units.

The Orlando division uses a backflush-costing system that records costs in materials inventory and conversion costs accounts and applies costs to products at the time production is completed.

There were no finished-goods inventories on January 1 and 30 units on January 31.

1. Prepare journal entries (without explanations) to record January’s costs for the Orlando division. Include the purchase of materials, incurrence of labor and manufacturing overhead costs, application of product costs, and recognition of cost of goods sold.

2. Prepare the journal entry to recognize over applied or under applied conversion costs at the end of January.