In December 2016, Learer Companys manager estimated next years total direct labor cost assuming 45 persons working an average of 2,000 hours each at an average wage rate of $30 per hour. The manager also estimated the following manufacturing overhead costs for 2017.

At the end of 2017, records show the company incurred $1,594,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $622,000; Job 202, $581,000; Job 203, $316,000; Job 204, $734,000; and Job 205, $332,000. In addition, Job 206 is in process at the end of 2017 and had been charged $35,000 for direct labor. No jobs were in process at the end of 2016. The companys predetermined overhead rate is based on direct labor cost.

Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 337,200 186,000 158,000 106,000 86,000 528,000 78,000 86,800 54,000 $1,620,000 Req 1A Req 1B Req 1C Req 2 Determine the over- or underapplied overhead at year-end 2017. Factory Overhead View transaction list View journal entry worksheet No Date General Journal Debit Credit Dec 31 Cost of goods sold Factory overhead