Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $$300,000$ for the year, and machine usage is estimated at $125,000$ hours.

For the year, $$322,000$ of overhead costs are incurred and $130,000$ hours are used.

Compute the manufacturing overhead rate and under$-$ or overapplied overhead.

Instructions

a$.$ Compute the manufacturing overhead rate for the year.

b$.$ What is the amount of under$-$ or overapplied overhead at December $31?$

c$.$ Prepare the adjusting entry to assign the under$-$ or overapplied overhead for the year to cost of goods sold.