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 $2.40 per machine-hour was based on a cost formula that estimates $225,600 of total manufacturing overhead for an estimated activity level of 94,000 machine-hours.

Required:

1. Assume that during the year the company works only 89,000 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.

Reg 1 Reg 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. Work in Process 850,000 104,000 (Direct materials) (Direct labor) (Overhead) (a) Manufacturing Overhead 35,000 9,400 68,000 41,000 8,400 55,000 (Maintenance) (Indirect materials) (Indirect labor) (Utilities) (Insurance) (Depreciation) Balance Reg 1 Reg 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 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 Record entry Clear entry View general journal