Is the manufacturing OH under or over applied? What is the amount? Compute the company's predetermined overhead rate for the year Medicval Ton inc is a state of the art manufacturing company utilizing the latest in robotics and computers to control production. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer hours. Medieval Toys used the following estimated information to Unfortunately, the economy went into recession during the year and resulted in invertory building up and a necessary cutback in production. The following actual Assume that the company allocates any under applied or over applied overhead to WIP. Finished Goods and COGS on the basis of the amount of overhead applied during the year that remains in each account at the end of the vear. How much higher or lower will net operating income be for the year if the underapplied or overapplied overhead is allocated rather than closed to COGS