Kody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Machine-hours required to support estimated production		157,000
Fixed manufacturing overhead cost	$	652,000
Variable manufacturing overhead cost per machine-hour	$	4.40

Required:

1.

Compute the predetermined overhead rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

2.	During the year Job 500 was started and completed. The following information was available with respect to this job:

Direct materials requisitioned	$	390
Direct labor cost	$	240
Machine-hours used		32

Compute the total manufacturing cost assigned to Job 500. (Round your intermediate calculations and final answer to 2 decimal places.)

3(a)

During the year the company worked a total of 145,300 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,244,815. What is the amount of underapplied or overapplied overhead for the year? (Round your intermediate calculations to 2 decimal places.)

3(b)	If this amount were closed out entirely to Cost of Goods Sold, would net operating income increase or decrease?