E$2-5$B Pronto Kopy Company applies operating overhead to photocopying jobs on the basis of machine hours used. Overhead costs are expected to total $$320,000$ for the year, and machine usage is estimated at $125,000$ hours.

For the year, $$308,000$ of overhead costs are incurred and $130,000$ hours are used.

Instructions

$($a$)$ Compute the service overhead rate for the year.

$($b$)$ What is the amount of under$-$ or overapplied overhead at December $31?$

$($c$)$ Assuming the under$-$ or overapplied overhead for the year is not allocated to inventory accounts, prepare the adjusting entry to assign the amount to cost of jobs finished.