Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $307,900 for the year, and machine usage is estimated at 125,200 hours. For the year, $330,887 of overhead costs are incurred and 132,900 hours are used.
1) Compute the manufacturing overhead rate for the year. (Round answer to 3 decimal places, e.g. 2.250.)
2) What is the amount of under- or overapplied overhead at December 31? (Round answer to 0 decimal places, e.g. 12,500.)
3) Assuming the under- or overapplied overhead for the year is not allocated to inventory accounts, prepare the adjusting entry to assign the amount to cost of goods sold.