Carera Corporation uses a predetermined overhead rate of $18 per direct labour-hour. This predetermined rate was based on 15,000 estimated direct labour-hours and $270,000 of estimated total manufacturing overhead. The company incurred actual total manufacturing overhead costs of $230,000 and 12,500 total direct labour-hours during the period.

Required:
1. Determine the amount of manufacturing overhead applied to units of product during the period as well as the amount of over- or underapplied overhead for the period.
2. Prepare the journal entry to dispose of over- or underapplied overhead.