1. Compute the overhead cost applied to Work in Process for the year and make the entry in your T-accounts.

2A. Compute the underapplied or overapplied overhead 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.
a. Option a: Calculate the actual overhead cost incurred during the year and compare it to the overhead cost applied to Work in Process to determine the underapplied or overapplied amount.
b. Option b: Use the predetermined overhead rate to calculate the overhead cost applied to Work in Process for the year based on the actual machine-hours worked.
c. Option c: Prepare a journal entry to transfer the underapplied or overapplied overhead amount from the Manufacturing Overhead account to the Cost of Goods Sold account.
d. Option d: Record the closing entry in the T-accounts to reflect the transfer of underapplied or overapplied overhead to Cost of Goods Sold.