Harwood Company uses a job-order costing system that applies overhead cost to jobs on the...
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Accounting
Harwood Company uses a joborder costing system that applies overhead cost to jobs on the basis of machinehours. The company's predetermined overhead rate of $ per machinehour was based on a cost formula that estimates $ of total manufacturing overhead for an estimated activity level of machinehours.
Required:
Assume that during the year the company works only machinehours 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 Taccounts.
A Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead Taccount.
B Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.
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