Swanson Corporation applies manufacturing overhead to jobs at a rate of $30 per direct labor hour. During the current period, actual overhead costs totaled $175,000, and 6,000 direct labor hours were worked by the company’s employees.
a. Record the journal entry to close the Manufacturing Overhead account directly to Cost of Goods Sold at the end of the period.
b. Was manufacturing overhead overapplied, or was it underapplied?