Medusa Products uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would incur $170,000 in manufacturing overhead costs for the year and work 85,000 machine-hours. Required: 1. Compute the company's predetermined overhead rate. Predetermined overhead rate per machine-hour 2. Assume that during the year the company actually works only 80,000 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. Manufacturing Overhead 14,000 Utilities Overhead Work in Process 530,000 85,000 Insurance Direct materials Direct labour Overhead 9,000 33,000 Maintenance Indirect materials Indirect labour Depreciation Balance 7,000 65,000 40.000 3. Compute the amount of underapplied or overapplied overhead for the year, and show the balance in your Manufacturing Overhead T-account. Prepare a journal entry to properly dispose of the balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the entry allocation of over applied overhead to the other account on the bases of amounts of overhead apply during the year in the ending balance during each account. Note: Enter debits before credits. General Journal Debit Credit Transaction 01 Record entry Clear entry View general journal