PNG Corporation designs and builds roller coasters for amusement parks. At the end of 20x1, managers estimated overhead costs for 20x2 of $150,000 based on expected production of 5 roller coasters using 5,000 labour hours each. Actual overhead costs for 20x2 were $170,000. PNG actually designed and built 6 roller coasters with the following direct labour usage and overhead costs:

Assume PNG uses a normal costing system with the number of labor hours as the overhead allocation base. a) How much overhead would be allocated to each job? b) Calculate the total over- or underapplied overhead (specify which) for each job.

The Big Dipper The Ultimate Scream Loop Me The Screaming Chicken You Don't Know Coasters Old Faithful Overhead Cost $28,000 35,000 27,000 40,000 25,000 15,000 Labour Hours 3,500 4,000 5,000 2,500 6,000 4,500