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 $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours. Required: 1. Assume that during the year the company works only 84,000 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. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. 2B. 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 2A Req 2B Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account from Req 1. Underapplied manufacturing overhead $ 14,000 < Req 1 Req 2B >

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter2: Job Order Costing
Section: Chapter Questions
Problem 1PA: Barnes Company uses a job order cost system. The following data summarize the operations related to...
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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 $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturing
overhead for an estimated activity level of 89,000 machine-hours.
Required:
1. Assume that during the year the company works only 84,000 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.
2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing
Overhead T-account.
2B. 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 2A
Req 2B
Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing
Overhead T-account from Req 1.
Underapplied
manufacturing overhead
$
14,000
< Req 1
Req 2B >
Transcribed Image Text: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 $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours. Required: 1. Assume that during the year the company works only 84,000 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. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. 2B. 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 2A Req 2B Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account from Req 1. Underapplied manufacturing overhead $ 14,000 < Req 1 Req 2B >
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