Cranston Kitchen Tools uses a job-order costing system and applies overhead cost to jobs based on machine hours. It calculates a predetermined overhead rate based on an allocation base of estimated machine usage. The company provided the following data for the month: nachine hours nachine hours Step 1: Compute the predetermined overhead rate by filling in the green cell. Predetermined overhead rate per machine hour Step 2: Compute the over/underapplied overhead by filling in the green cells. Recall that over/underapplied overhead = Actual overhead - Applied overhead. So, we need two items: (1) Actual overhead and (2) Applied overhead. First, calculate the actual overhead. Next, calculate the applied overhead. Recall that applied overhead = Actual Activity POHR. We already calculated the POHR in Step 1. Now, we need the actual activity. For this problem, the activity base is the machine hours. We therefore use the actual number of machine hours for the month to calculate the applied manufacturing overhead. Now, we can calculate the over/underapplied manufacturing overhead. Hint: For the T-account, fill out only the appropriate side (debit or credit) for each line. Is the overhead underapplied? Type "Yes" or "No". Step 3: Complete the Cost of Goods Manufactured Schedule by filling in the green cells Schedule of Cost of Goods Manufactured Step 4: Calculate the unadjusted Cost of Goods Sold by filling in the green cells Step 5: Calculate the adjusted Cost of Goods Sold by filling in the green cells Hint: Whether to add or subtract depends on whether the overhead was overapplied vs. underapplied. Do we report the unadjusted COGS or adjusted COGS on the income statement? Type "Unadjusted" or "Adjusted