Fairfield Company applies manufacturing overhead to products at a predetermined rate of $50 per direct labor hour. Its actual manufacturing costs for the most recent period are summarized here: Item Direct materials Indirect materials Hourly labor wages Factory supervision Production engineer Factory janitorial work Selling, general, and administrative salaries Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.) Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.) Description Used on Jobs 101 and 102 Used on multiple jobs 840 hours @ $25 per hour 180 hours for Job 101 = 270 hours for Job 102 = 390 hours for Job 103 = $ 4,500 6,750 9,750 Total Cost $ 71,000 13,600 21,000 3,350 5,500 1,700 9,000 6,900 4,400 Required: 1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold. 2. Indicate whether the entry in requirement 1 will increase or decrease Cost of Goods Sold.

Fairfield Company applies manufacturing overhead to products at a predetermined rate of $50 per direct labor hour. Its actual manufacturing costs for the most recent period are summarized here: Required: 1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold. 2. Indicate whether the entry in requirement 1 will increase or decrease Cost of Goods Sold