Harwood Company uses a job$-$order costing system that applies overhead cost to jobs on the basis of machine$-$hours. The company's predetermined overhead rate of $$2\mathrm{.}50$ per machine$-$hour was based on a cost formula that estimates $$217,500$ of total manufacturing overhead for an estimated activity level of $87,000$ machine$-$hours.

Required:

Assume that during the year the company works only $82,000$ machine$-$hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T$-$accounts.

$2$A$.$ Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T$-$account.

$2$B$.$ Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

Complete this question by entering your answers in the tabs below.

Req $2$B

Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T$-$accounts.

$\backslash$table$[[$Manufacturing Overhead$],[($Maintenance$),28,000,($a$),],[($Indirect materials$),8,700,,],[($Indirect labor$),67,000,,],[($Utilities$),34,000,,],[($Insurance$),7,700,,],[($Depreciation$),63,000,,],[$Balance$,,,]]$

$\backslash$table$[[$Work in Process,$],[($Direct materials$),780,000,,],[($Direct labor$),97,000,,],[($Overhead$)($a$),,,],[,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$