Exercise $3\mathrm{.}9($Algo$)$ Applying Overhead; T$-$accounts; Journal Entries $[$LO$3-1,$ LO$3-2,$ LO$3-4]$

Harwood Company uses a job$-$order costing system that applies overhead cost to jobs on the basis of machine$-$hours. The company's predetermined overhead rate of $$2\mathrm{.}40$ per machine$-$hour was based on a cost formula that estimates $$201,600$ of total manufacturing overhead for an estimated activity level of $84,000$ machine$-$hours.

Required:

Assume that during the year the company works only $79,000$ machine$-$hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T$-$accounts.

$2$A$.$ Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T$-$account.

$2$B$.$ Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$ A

Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T$-$accounts.

$\backslash$table$[[$Manufacturing Overhead,Work in Process$],[$Debit$,$Credit,Debit,Credit$],[($Maintenance$),25,000,25,000,($a$),($Direct materials$),750\mathrm{.}000,],[($Indirect materials$),8,400,,,($Direct labor$),94,000,],[($Indirect labor$),70,000,,,($Overhead$)($a$),201,600,],[($Utilities$),32,000,,$i$.,,,],[($Insurance$),7,400,,,,,],[($Depreciation$),50,000,,,,,],[$Balance$,28\mathrm{.}800,,,,,]]$