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 $254,800 of total manufacturing overhead for an estimated activity level of 91,000 machine-hours.

Required:

1. Assume that during the year the company works only 86,000 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. A journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

Required 1.

Manufacturing Overhead

(Maintenance) 32,000 ?

(Indirect materials) 9,000

(Indirect labor) 92,000

(Utilities) 43,000

(Insurance) 8,000

(Depreciation) 60,000

Balance ?

Work in process

(Direct materials) 820,000

(Direct labor) 101,000

(Overhead) (a) ?

Required 2.

Over-applied / Under-applied ? --- Manufacturing overhead = ?

Required 3.

Event General Journal Debit Credit

1