Rails Inc. has calculated the following variances for the past month: Direct materials price variance Direct materials quantity variance Direct labour rate variance Direct labour efficiency variance Variable overhead spending variance Variable overhead efficiency variance Fixed overhead budget variance Fixed overhead volume variance $ 200 U 300 F 500 F 1,500 F 450 U 1.350 F 500 U 275 F Required: 1. Calculate the balance in the manufacturing overhead clearing account and indicate whether it is a debit or credit balance. (2.5 marks) 2. State whether the manufacturing overhead account is under-applied or over-applied. (0.5 marks)