Question

# Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs...

Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total \$348,189 for the year, and machine usage is estimated at 125,700 hours.

For the year, \$444,755 of overhead costs are incurred and 131,500 hours are used.

Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.)

What is the amount of under- or overapplied overhead at December 31?

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

 1) manufacturing overhead rate Estimated overhead costs/estimated machine usage 348,189/125,700 2.77 per machine hour 2) Actual manufacturing overhead incurred 444,755 MOH applied (2.77*131,500)= 355050 overhead under applied 89,705 3) Adjusting entry General Journal Debit Credit Cost of goods sold 89,705 Manufacturing overhead 89,705

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