Brooks Foundry in Charleston, South Carolina, uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the machine hours required.

At the beginning of the year, the company expected to incur the following:

Manufacturing overhead costs........................................................ $ 650,000

Direct labor cost............................................................................ $1,300,000

Machine hours..................................................................................... 81,250

At the end of the year, the company had actually incurred the following:

Direct labor cost............................................................................... $1,190,000

Depreciation on manufacturing plant and equipment........................ $ 485,000

Property taxes on plant........................................................................ $ 21,500

Sales salaries........................................................................................ $ 26,000

Delivery drivers' wages....................................................................... $ 14,500

Plant janitors' wages............................................................................ $ 11,000

Machine hours............................................................................... 54,500 hours

Requirements

1. Compute Brooks' predetermined manufacturing overhead rate.

2. How much manufacturing overhead was allocated to jobs during the year?

3. How much manufacturing overhead was incurred during the year? Is manufacturing overhead under-allocated or over-allocated at the end of the year? By how much?

4. Were the jobs overcosted or undercosted? By how much?