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 24,000 8,300 82,000 36,000 7,300 65,000 Work in Process 740,000 93,000 (Maintenance) (Indirect materials) (Indirect labor) (Utilities) (Insurance) (Depreciation) Balance (Direct materials) (Direct labor) (Overhead) (a) Req1 Req 2A