P4.41 LO 4.10 (appendix) Proration of overapplied or underapplied overhead: manufacturer Luxury Goods Pty Ltd allocates manufacturing overhead to work in process on the basis of machine hours. On 1 January of the current year, there were no balances in work in process or finished goods inventories. The following estimates were included in the budget for the current year: Total estimated manufacturing overhead Total estimated machine hours During January, the firm worked on the following production jobs: B81 J76 M49 $600.000 40000 1600 machine hours 2400 machine hours 1.000 machine hours During January, jobs number B81 and J76 were completed, and job number B81 was sold. The actual manufacturing overhead incurred during January was $60,000. Required 1. Calculate the company's predetermined overhead rate for the year. 2. How much manufacturing overhead was applied to production during January? 3. Calculate the overapplied or underapplied overhead for January. 4. Prepare a journal entry to close the balance calculated in requirement 3 to cost of goods sold. 5. Prepare a journal entry to prorate the balance calculated in requirement 3 between the work in process inventory, finished goods inventory and cost of goods sold accounts.