Sicily Company reported the following actual cost data for the year: purchase of raw materials (all direct) 266,000 direct labour cost 160,000 manufacturing overhead costs 246,000 change in inventories: decrease

Sicily Company reported the following actual cost data for the year: purchase of raw materials (all direct)                                266,000 direct labour cost                                                                160,000 manufacturing overhead costs                                            246,000 change in inventories: decrease in raw materials                                                     10,000 decrease in work in process                                                   8,000 decrease in finish goods                                                      16,000 Sicily Company used a 150% predetermined overhead rate based on direct labour cost. The rate was based on annual estimated overhead cost and direct labour cost of $252,000 and $168,000, respectively. Required: A. By how much was manufacturing overhead cost under or overapplied? B. Prepare a summary journal entry to close any under or overapplied manufacturing overhead cost to cost of goods sold. C. Analyze the under or overapplied manufacturing overhead costs calculated in part c above into two separate components: amount due to incorrect estimate of the annual manufacturing overhead costs and an amount due to incorrect estimate of the annual direct labour cost.

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