Renteria Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $305,000 for the year, and machine usage is estimated at 125,000 hourse.
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.