Ramirez Company applies manufacturing overhead to jobs on the basis of ma chine hours used. Overhead costs are expected to total \($275,000\) for the year, and ma- chine usage is estimated at 125,000 hours. In January. \($26.000\) of overhead costs are incurred and 12,000 machine hours are used. For the remainder of the year, \($274,000\) of overhead costs are incurred and 118,000 machine hours are worked.

Instructions

(a) Compute the manufacturing overhead rate for the year.

(b) What is the amount of under- or overapplied overhead at January 31? How should this amount be reported in the financial statements prepared on January 31?

(c) What is the amount of under- or overapplied overhead at December 31?

(d) Assuming the under- or overapplied overhead for the year is not allocated to inven- tory accounts, prepare the adjusting entry to assign the amount to cost of goods sold.