In December 2014, Custom Mfg. established its predetermined overhead rate for jobs produced during year 2015 by using the following cost predictions: overhead costs, $750,000, and direct labor costs, $625,000. At year-end 2015, the companys records show that actual overhead costs for the year are $830,000. Actual direct labor cost had been assigned to jobs as follows.

Jobs completed and sold $ 513,750

Jobs in finished goods inventory 102,750

Jobs in work in process inventory 68,500

Total actual direct labor cost $ 685,000

2&3.

Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.