Kwik Kopy Company applies operating overhead to photocopying jobs on the basis of machine hours used. Overhead costs are expected to total $290,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $295,000 of overhead costs are incurred and 130,000 hours are used.

Instructions

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

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

(c) Assuming the under- or overapplied overhead for the year is not allocated to inventory accounts, prepare the adjusting entry to assign the amount to cost of jobs finished.