Dugan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $339,300 for the year, and machine usage is estimated at 125,700 hours.
For the year, $358,964 of overhead costs are incurred and 131,100 hours are used.
a) Compute the Manufacturing Overhead rate per machine hour
b) What is the amount of Overhead under-applied?
c) Prepare an adjusting entry to assign the under or over applied overhead for the year to Cost of Goods Sold.