2 Applying Overhead; T-accounts; Journal Entries Harwood Company uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that 80,000 machine-hours would be required for the period's estimated level of production. The company also estimated $128,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $0.80 per machine-hour. Required: . 1. Compute the company's predetermined overhead rate. 2. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Manufacturing Work in Overhead Process (Maintenance) 21,000? (Direct materials) 710,000 (Indirect materials) (Direct labor) (Indirect labor) (Overhead) (Utilities) (Insurance) (Depreciation) Copy the data in the T-accounts above onto your answer sheet. Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. . 3. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. Prepare a journal entry to close out the balance in this account to Cost of Goods Sold. . 4. Explain why the manufacturing overhead was underapplied or overapplied for the year. 90,000 ? 8,000 60,000 32,000 7.000 56.000