Exercises Chapter $2$

E$2-5$ Roprin Corporation applies manufacturing overhead to jobs based on machine hours used. Overhead costs are expected to total $$325,000$ for the year, and machine usage is estimated at $125,000$ hours.

For the year, $$342,000$ of overhead costs are incurred and $130,000$ hours are used.

Instructions:

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

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

$($c$)$ Prepare the adjusting entry to assign the under$-$ or overapplied overhead for the year to cost of goods sold.