Kent Company and Trent Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year.

Required
a. Compute the predetermined overhead rate for each company.
b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each company, assuming the amounts are immaterial.

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Trent Company $240,000 24,000 12,000 Kent Company Actual manufacturing overhead Actual direct labor hours Underapplied overhead Overapplied overhead $120,000 20,000 24,000