PROBLEM 5-18 Applying Overhead; T-Accounts; Journal Entries [LO3, LO4, LO5, LO7] Medusa Products uses a job-order costing system. Overhead costs are applied to jobs on the basis of miachine-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. 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: Copy the data in the T-accounts above onto your answer sheet. 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. 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. 4. Explain why the manufacturing overhead was underapplied or overapplied for the year