Mark Corporation estimates its manufacturing overhead to be $90,000 and its direct labor costs to be $200,000 for year 1. The actual direct labor costs were $50,000 for Job 301, $75,000 for Job 302, and $100,000 for Job 303 during year 1; the actual manufacturing overhead was $97,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates. Overhead applied in each of the inventory accounts is as follows: Work-in-process inventory $ 10,125 Finished goods inventory 30,375 Cost of goods sold 60,750 Required: Prepare an entry to allocate the under- or overapplied overhead. (Omit the "$" sign in your response.) General Journal Debit Credit Applied Manufacturing overhead Manufacturing overhead control cost of good sold work in process inventory Finished goods inventory

\fSOLUTION: Predetermined Overhead Rate = Budgeted Manufacturing Overheads / Direct Labor Cost Predetermined Overhead Rate = $90,000 / $200,000 Predetermined Overhead Rate 45.00% Total Direct Labor Cost = $50,000 + $75,000 + $100,000 Total Direct Labor Cost $225,000.00 Applied Overheads = Total Direct Labor Cost * Predetermined Overhead Rate Applied Overheads = $225,000 * 45% Applied Overheads $101,250.00 OverApplied Overheads = Applied Overheads - Actual Overheads OverApplied Overheads = $101,250 - $97,000 OverApplied Overheads Applied Manufacturing Overhead Manufacturing Overhead Control Work in process Inventory Finished goods Inventory Cost of goods sold $4,250.00 $101,250.00 $97,000.00 $425.00 $1,275.00 $2,550.00 SOLUTION: Predetermined Overhead Rate = Budgeted Manufacturing Overheads / Direct Labor Cost Predetermined Overhead Rate = $90,000 / $200,000 Predetermined Overhead Rate 45.00% Total Direct Labor Cost = $50,000 + $75,000 + $100,000 Total Direct Labor Cost $225,000.00 Applied Overheads = Total Direct Labor Cost * Predetermined Overhead Rate Applied Overheads = $225,000 * 45% Applied Overheads $101,250.00 OverApplied Overheads = Applied Overheads - Actual Overheads OverApplied Overheads = $101,250 - $97,000 OverApplied Overheads Applied Manufacturing Overhead Manufacturing Overhead Control Work in process Inventory Finished goods Inventory Cost of goods sold $4,250.00 $101,250.00 $97,000.00 $425.00 $1,275.00 $2,550.00