Townley Inc Manufacturing Overhead for the Month Was Overapplied by $3,000

question 133

Essay

Townley Inc.has provided the following data for the month of February.There were no beginning inventories;consequently,the direct materials,direct labor,and manufacturing overhead applied listed below are all for the current month.
$$\begin{array} { | l r | r | r | r | } \hline & \begin{array} { r } \text { Wotk-in- } \\\text { Process }\end{array} & \begin{array} { r } \text { Finshed } \\\text { Goods }\end{array} & \begin{array} { r } \text { Cost of } \\\text { Goods } \\\text { Sold }\end{array} & \text { Total } \\\hline \text { Direct materials } & \$ 7,570 & \$ 19,200 & \$ 36,280 & \$ 62,060 \\\hline \text { Direct labor } & 8,810 & 24,000 & 44,100 & 76,910 \\\hline \begin{array} { l } \text { Manutacturing } \\\text { overhead } \\\text { applied }\end{array} & 8,320 & 15,600 & 28,080 & 52,000 \\\hline \text { Total } & \$ 24,700 & \$ 58,800 & \$ 107,460 & \$ 190,960 \\\hline\end{array}$$
Manufacturing overhead for the month was overapplied by $3,000.The company allocates any underapplied or overapplied overhead among Work-in-Process,finished goods,and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
Required:
Provide the journal entry that would record the allocation of underapplied or overapplied among Work-in-Process,finished goods,and cost of goods sold.

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Definitions:

Nonlabor Resources

Inputs in production that do not involve human labor, such as capital, land, and natural resources.

Marginal Product

The additional output produced as a result of adding one more unit of a specific input, holding other inputs constant.

Total Product

The total output or production achieved by a firm with a given amount of resources.

Average Product

The output per unit of input, calculated by dividing the total product by the quantity of input, reflecting the efficiency of production.