OLeary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). OLeary uses a normal job costing system. Direct labor at OLeary is paid $19 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows:

		Year 1			Year 2
Direct labor-hours worked		70,800			55,800
Manufacturing overhead costs incurred
Indirect labor	$	2,778,000		$	2,187,000
Employee benefits		1,053,000			828,000
Supplies		708,000			558,000
Power		553,800			583,800
Heat and light		139,800			139,800
Supervision		718,050			778,050
Depreciation		1,984,300			1,984,300
Property taxes and insurance		753,050			753,050
Total manufacturing overhead costs	$	8,688,000		$	7,812,000

At the beginning of year 3, OLeary has two jobs, which have not yet been delivered to customers. Job MC-270 was completed on December 27, year 2. It is scheduled to ship on January 7, year 3. Job MC-275 is still in progress. The predetermined rate in year 2 was $130 per direct labor hour. Data on direct material costs and direct labor-hours for these jobs in year 2 follow:

	Job MC-270			Job MC-275
Direct material costs	$	271,800		$	496,800
Direct labor-hours		2,680	hours		3,380	hours

During year 3, OLeary incurred the following direct material costs and direct labor hours for all jobs worked in year 3, including the completion of Job MC-275.

Direct material costs	$	12,020,000
Direct labor-hours		75,800
Actual manufacturing overhead	$	9,102,000

For the purpose of computing the predetermined overhead rate, OLeary uses the previous years actual overhead rate. At the end of year 3, there were four jobs that had not yet shipped. Data on these jobs follow:

	MC-389			MC-390			MC-397			MC-399
Direct materials	$45,000			$68,800			$105,300			$30,700
Direct labor-hours	1,920 hours			1,112 hours			4,584 hours			1,480 hours
Job status	Finished			Finished			In progress			In progress

Required:

a. What was the amount in the beginning Finished Goods and beginning Work-in-Process accounts for year 3?

b. OLeary incurred direct materials cost of $58,800 and used an additional 318 hours in year 3 to complete job MC-275. What was the final (total) cost charged to job MC-275?

c. What was over- or underapplied overhead for year 3? *Amount and if it was over or underapplied *