Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account.

manufacturing overhead

• Record the entry to close the balance of the manufacturing overhead account to COGS account.

Note: Enter debits before credits.

EventGeneral JournalDebitCredita.

Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours.

Required:

1. Assume that during the year the company works only 84,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: 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.

2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account.

2B. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

• Req 1
• Req 2A
• Req 2B

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.

Manufacturing OverheadWork in ProcessDebitCreditDebitCredit(Maintenance)30,000(a)(Direct materials)800,000(Indirect materials)8,900(Direct labor)99,000(Indirect labor)80,000(Overhead) (a)(Utilities)43,000(Insurance)7,900(Depreciation)70,000Balance