Required information (The following information applies to the questions displayed below.) Garcia, Inc., uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities. The company applies manufacturing overhead using machine hours in the Machining Department and direct-labor cost in the Assembly Department. The following information relates to the year just ended: Machining Assembly Department Department $4,000,000 $3,024,000 4,260,000 3,030,000 Budgeted manufacturing overhead Actual manufacturing overhead Budgeted direct-labor cost (based on practical capacity) Actual direct-labor cost Budgeted machine hours (based on practical capacity) Actual machine hours 1,500,000 1,450,000 5,600,000 5,780,000 400,000 425,000 100,000 110,000 The data that follow pertain to job no. 775, the only job in production at year-end. Direct material Direct labor Machine hours Machining Assembly Department Department $24,500 $ 6,700 $27,900 $58,500 350 150 Selling and administrative expense amounted to $2,500,000. 3. Determine whether overhead was under- or overapplied during the year in the Machining Department. Overapplied overhead Underapplied overhead