Problem - Brentwood Associates uses a job-order costing system and applies overhead on the basis of direct labor hours. At the beginning of the year, management estimated that 26,000 direct labor hours would be worked and $1,300,000 of manufacturing overhead costs would be incurred.

During the year, the company actually worked 24,000 direct labor hours and incurred the following manufacturing costs:

Direct Materials used in production                       1,240,000

Direct Labor                                                       1,800,000

Indirect labor                                                     280,000

Indirect materials                                               220,000

Insurance                                                          150,000

Utilities                                                              190,000

Repairs and Maintenance                                    180,000

Depreciation                                                      320,000

1. Calculate the predetermined overhead application rate for the year.

2. Determine the amount of manufacturing overhead applied to work in process during the year

3. Determine the amount of underapplied or overapplied overhead for the year.