Allocating and adjusting manufacturing overhead Young Foundry uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on the machine hours required. At the beginning of 2018, the company expected to incur the following: Requirements 1. Compute Young's predetermined overhead allocation rate. 2. Prepare the journal entry to allocate manufacturing overhead. 3. Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. Is manufacturing overhead underallocated or overallocated? By how much? 4. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead. Does your entry increase or decrease Cost of Goods Sold? Manufacturing overhead costs $ 340,000 Direct labor costs 1,480,000 Machine hours 70,000 hours At the end of 2018, the company had actually incurred: Direct labor costs $ 1,230,000 620,000 Depreciation on manufacturing plant and equipment Property taxes on plant Sales salaries 35,500 26,000 22,500 Delivery drivers' wages Plant janitor's wages Machine hours 17,000 60,000 hours