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Exercise 2-5 (Video) Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used

Accounting

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Exercise 2-5 (Video)

Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $301,920 for the year, and machine usage is estimated at 125,800 hours.

For the year, $327,140 of overhead costs are incurred and 132,100 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. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)