4. This question relates to pre-determined overhead rates. At year end, Toms Trinkets ACTUAL OVERHEAD for the year was $203,300 with a total of 84,000 direct labor hours worked. When estimating jobs during the year, their accounting department told them to use a pre-determined overhead rate of $2.60 per labor hour. During the year, did they overapply or underapply overhead and by how much? (Chapter 3)

5. For the above question #4, the accounting department will make an adjusting journal entry so actual activity is represented on their income statement. Will they be making an entry that reflects an increase or decrease in reported Net Income?