Example $8.$ Job Order Costing in a Manufacturing Environment

Question: Jojo's Dojos Incorporated applies overhead based on direct labor hours. The company estimated that it would incur $$100,000$ in overhead and use $50,000$ direct labor hours during the year. Actual overhead was $$110,000,$ and actual direct labor hours were $52,000.$ Calculate the predetermined overhead rate, applied overhead, and the amount of underapplied or overapplied overhead. Provide detailed step$-$by$-$step calculations and explanations.