Answer:
a) 130,000 underapplied
b) COGS 130,000 debit
Manufacturing Overhead 130,000 credit
c)
COGS 91,000
Finished Goods 32,500
WIP inventory 6,500
Manufacturing Overhead 130,000 credit
Explanation:
Adding the MO on each category we can detemrinate the applied overhead:
504,000 + 180,000 + 36,000 = 720,000
Actual overhead 850,000
As it is higher than applied we faced an underapplied overhead of 130,000
b) to amend we increase COGS and the applied overhead to match the actual numbers
c) proportional:
720,000 has 130,000 underapplied --> 130,000 / 720,00 = 0.1805555
504,000 has 504,000 x 0.1805555 = 91,000
180,000 has 504,000 x .01805555 = 32,500
36,000 has 36,000 x 0.18055555 = 6,500