The manufacturing records for Bob’s Boats at the end of the 2016 fiscal year show the following information about manufacturing overhead:
Overhead allocated to production....... $ 409,500
Actual manufacturing overhead costs..... 425,000
Predetermined overhead allocation rate.....45 per machine hour
Requirements
1. How many machine hours did Bob’s Boats use in 2016?
2. Was manufacturing overhead overallocated or underallocated for the year, and by how much?
3. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead.