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Problem - Ikerd Company applies 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.
Instructions -
(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.
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