Exercise 2A-5 Marigold Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $342,273 for the year, and machine usage is estimated at 126,300 hours. For the year, $450,517 of overhead costs are incurred and 132,700 hours are used.

Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.)

Manufacturing overhead rate

$

per machine hour

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What is the amount of under- or overapplied overhead at December 31?

Manufacturing Overhead

$ UnderappliedOverapplied

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Indicate the effect of the adjustment to assign the under- or overapplied overhead for the year to cost of goods sold.

The adjustment to assign the underapplied overhead to Cost of Goods Sold will increasedecrease Manufacturing Overhead and increasedecrease Cost of Goods Sold.

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