EXERCISE 3-9 Applying Overhead; T-accounts; Journal Entries LO3-1, LO3-2, LO3-4 Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.40 per machine-hour was based on a cost formula that estimates $192,000 of total manufacturing overhead for an estimated activity level of 80,000 machine-hours. Required: 1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Manufacturing Overhead Work in Process (Maintenance) (Indirect materials) (Indirect labor) (Utilities) (Insurance) (Depreciation) 710,000 90,000 ? 21,000? 8,000 60,000 32,000 7,000 56,000 (Direct materials) (Direct labor) (Overhead) 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. 2. 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 close the company's underapplied or overapplied overhead to Cost of Goods Sold. 3. Explain why the manufacturing overhead was underapplied or overapplied for the year