Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $300,000 for the year, and machine usage is estimated at 125,000 hours.
For the year, $322,000 of overhead costs are incurred and 130,000 hours are used.
(a) Compute the manufacturing overhead rate for the year.
(b) What is the amount of under-or overapplied overhead at December 31?
(c) Prepare the adjusting entry to assign the under-or overapplied overhead for the year to cost of goods sold.