"Jacques's Performance Pizza is a small restaurant in New York City that sells gluten-free pizzas. Jacques's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Jacques signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Jacques's kitchen cannot fit more than three ovens, Jacques cannot change the number of ovens he uses in his production of pizzas in the short run."

Harwood company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. the company's predetermined overhead rate of $2.50 per machine-hour was based on a cost formula that estimates $240,000 of total manufacturing overhead for an estimated activity level of 96,000 machine-hours. required: 1. assume that during the year the company works only 91,000 machine-hours 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 t-accounts. 2a. compute the amount of underapplied or overapplied overhead for the year and show the balance in your manufacturing overhead t-account. 2b. prepare a journal entry to close the company's underapplied or overapplied overhead to cost of goods sold.