Garrison, Inc., which uses a job-costing system, began business on January 1, 20x3 and applies manufacturing overhead on the basis of direct-labor cost. The following information relates to 20x3:

• Budgeted direct labor and manufacturing overhead were anticipated to be $330,000 and $412,500, respectively.
• Job nos. 1, 2, and 3 were begun during the year and had the following charges for direct material and direct labor:

Job No. Direct Materials Direct Labor

1. $158,000 $48,000

2 333,000 78,000

3 68,000 93,000

• Job nos. 1 and 2 were completed and sold on account to customers at a profit of 60% of cost. Job no. 3 remained in production.
• Actual manufacturing overhead by year-end totaled $280,000. Garrison adjusts all under- and overapplied overhead to cost of goods sold.

Required:

A.Compute the company's predetermined overhead application rate.

B.Compute Garrison's ending work-in-process inventory.

C.Determine Garrison's sales revenue.

D.Was manufacturing overhead under- or overapplied during 20x3? By how much?

E.Present the necessary journal entry to handle under- or overapplied manufacturing overhead at year-end.