Custom Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2016 follow:

Requirements
1. Compute the predetermined overhead allocation rate.
2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.
3. Prepare the journal entry to adjust for underallocated or overallocated overhead.
4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don€™t accountants just use the actual manufacturing overhead rate?

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Actual 32,800 hours 29,500 48,000 49,000 93,850 45,500 86,000 59,000 Estimated Machine hours Maintenance labor (repairs to equipment) 14,000 Plant supervisor's salary Screws, nails, and glue Plant utilities Freight out Depreciation on plant and equipment Advertising expense 28,960 hours 45,000 25,000 46,000 36,000 87,200 41,000