Tortolla Company is a manufacturing firm that uses a job-order costing system. The company uses machine hours to apply overhead to work-in-process. On January 1, Tortolla's management estimated that it would incur \(\$ 700,000\) in manufacturing overhead costs and 56,000 machine hours over the coming year.

a. Compute the company's predetermined overhead rate for the year.

b. Assume that the company uses only 54,000 machine hours over the year and incurs the following manufacturing costs:

Compute the amount of overhead that was applied to production and the amount of overor underapplied overhead for the period.

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Maintenance Depreciation Indirect materials $ 56,000 206.000 76,000 Utilities 164,000 Insurance 94,000 Indirect labor 64,000