Braemar Saddlery uses department budgets and performance reports in planning and controlling its manufacturing operations. The following annual performance report for the custom saddle production department was presented to the president of the company.

Budgeted Costs

for $5,000$ Units Actual

Costs

Incurred Over

$($Under$)$

Budget

Per Unit Total

Variable manufacturing costs:

Direct materials $ $30\mathrm{.}00$ $ $150,000$ $ $171,000$ $ $21,000$

Direct labor $48\mathrm{.}00240,000261,50021,500$

Indirect labor $15\mathrm{.}0075,00095,50020,500$

Indirect materials, supplies, etc. $9\mathrm{.}0045,00048,4003,400$

Total variable manufacturing costs $ $102\mathrm{.}00$ $ $510,000$ $ $576,400$ $ $66,400$

Fixed manufacturing costs:

Lease rental $ $9\mathrm{.}00$ $ $45,000$ $ $45,000$ $ $0$

Salaries of foremen $24\mathrm{.}00120,000125,0005,000$

Depreciation and other $15\mathrm{.}0075,00078,6003,600$

Total fixed manufacturing costs $ $48\mathrm{.}00$ $ $240,000$ $ $248,600$ $ $8,600$

Total manufacturing costs $ $150\mathrm{.}00$ $ $750,000$ $ $825,000$ $ $75,000$

Although a production volume of $5,000$ saddles was originally budgeted for the year, the actual volume of production achieved for the year was $6,000$ saddles. Direct materials and direct labor are charged to production at actual cost. Factory overhead is applied to production at the predetermined rate of $150$ percent of the actual direct labor cost.

After a quick glance at the performance report showing an unfavorable manufacturing cost variance of $$75,000,$ the president said to the accountant: $$Fix this thing so it makes sense. It looks as though our production people really blew the budget. Remember that we exceeded our budgeted production schedule by a significant margin. I want this performance report to show a better picture of our ability to control costs.$$

Required:

a$.$ Prepare a revised performance report for the year on a flexible budget basis. Use the same format as the production report above, but revise the budgeted cost figures to reflect the actual production level of $6,000$ saddles.

c$.$ What is the amount of over$-$ or underapplied manufacturing overhead for the year?