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 $2.80 per machine-hour was based on a cost formula that estimates $232,400 of total manufacturing overhead for an estimated activity level of 83,000 machine-hours.

Required:

1. Assume that during the year the company works only 78,000 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.

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

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

Req 1 Req 2A Req 2B 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. Manufacturing Overhead Work in Process 24,000 (a) 740,000 8,300 (Direct materials) (Direct labor) (Overhead) (a) 93,000 82,000 (Maintenance) (Indirect materials) (Indirect labor) (Utilities) (Insuranc (Depreciation) 36,000 7,300 65,000 Balance Reg 1 Reg 2A Req 1 Req 2A Req 2B Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account from Req 1. manufacturing overhead Journal entry worksheet 1 Record the entry to close the balance of the manufacturing overhead account to COGS account. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal