Sony Corp. uses a job order costing system with manufacturing overhead

applied to products on the basis of direct labor hours. For the upcoming year, Sony Corp estimated total manufacturing overhead cost at $900,000 and total direct labor hours of 50,000. Sony Corp. started the year with no beginning balances in either Work in Process Inventory or Finished Goods Inventory.

During the year actual manufacturing overhead incurred was $879,900 and 47,600 direct labor hours were used.

1. Calculate the predetermined overhead rate.

2. Calculate how much manufacturing overhead will be applied to production.

3. Is overhead over- or underapplied? By how much?

4. What account should be adjusted for over- or under applied overhead? Should the balance of this account be increased or decreased?