Applied vs. Actual Manufacturing Overhead Davis Manufacturing Corporation applies manufacturing overhead on the basis of 140% of direct labor cost. An analysis of the related accounts and job order cost sheet indicates that during the year total manufacturing overhead incurred was $315,000 and that at year-end Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $40,000, $20,000, and $140,000, respectively, of direct labo incurred during the current year. a. Determine the under applied manufacturing overhead at year-end (assume it is significant). Applied Manufacturing Overhead Work in process Finished goods 11,200 x 20,000 x Cost of goods sold 140,000 x Total: $ 300,000 x Under-applied manufacturing overhead $ 35,000 b. Prepare a journal entry to record the disposition of the underapplied manufacturing overhead. General Journal Description Debit Credit Work in process inventory 11,200 x 0 Finished goods inventory 0x 0 Cost of goods sold 0 x 0 Manufacturing overhead 0 0 % Check