38. Closing Manufacturing Overhead: Two Approaches. Denner Company incurred actual manufacturing overhead costs of $260,000 during the year ended December 31, 2016. A total of $350,000 in overhead was applied to jobs. At December 31, 2016, work-in-process inventory totals $100,000, and finished goods inventory totals $300,000. Cost of goods sold before adjustments totals $600,000 for the year. Required: a. Is overhead underapplied or overapplied? b. Close the manufacturing overhead account, assuming the balance is immaterial. c. Close the manufacturing overhead account, assuming the amount is material. 2 PROBLEMS (continued) 38. Closing Manufacturing Overhead: Two Approaches 6 a. 7 8 9 b. 10 11 IL 13 15 16 17 18 19 LO Manufacturing Overhead Work in Process Inventory Finished Goods Inventory Cost of Goods Sold 21 22 23 24 25 LU 27 28 29 30 Amounts are calculated as follows: Account Balance Percent of Total Allocation Amount % * $90,000) 31 32 33 Account WIP Inventory Finished Goods Inventory Cost of Goods Sold Total 34 35 35 37