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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the

Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

Machine-hours 86,000
Fixed manufacturing overhead cost $ 1,272,000
Variable manufacturing overhead per computer-hour $ 3.70

During the year, a glut of furniture on the market resulted in cutting back production and a buildup of furniture in the companys warehouse. The companys cost records revealed the following actual cost and operating data for the year:

Machine-hours 60,000
Manufacturing overhead cost $ 1,209,000

Required:
1.

Compute the companys predetermined overhead rate for the year.(Round your answer to 2 decimal places.)

2.

Compute the underapplied or overapplied overhead for the year.(Round your intermediate calculations to 2 decimal places.)

3.

Assume the company closes any underapplied or overapplied overhead directly to Cost of Goods Sold. Prepare the appropriate entry.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations to 2 decimal places.)

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