Exercise 7-32 (Algo) Prorate Over- or Underapplied Overhead (LO 7-3) Yarra Fabrication estimates that its manufacturing overhead will be $2,291,200 in year 1. It further estimates that direct material costs will amount to $1.432,000. Actual manufacturing overhead costs for the year were $2.440,000. Actual direct materials costs were $1,590,000. Manufacturing overhead is applied to jobs based on direct materials cost using predetermined rates. The total applied overhead for the year was $2,544,000 The balance in each of the inventory accounts is as follows. Work-in-process inventory Finished goods inventory Cost of goods sold $ 473,000 $1,118,000 $7,009,000 Required: Prepare an entry to allocate the over- or underapplied overhead. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Saved Prepare an entry to allocate the over- or underapplied overhead. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < A Record an entry to allocate the over- or underapplied overhead. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 No journal entry required Record entry Accounts payable Accounts receivable Applied manufacturing overhead Cost of goods sold Clear entry View general journal entry Finished goods inventory Inventory Manufacturing overhead control Wages payable Work-in-process inventory Clear entry