The management of Royal Corporation would like to investigate the possibility of basing its predetermined overhead rate ca activify at capacity rather than of the estimated amount of activity for the year. The company's controller has provided an example to illustrate hot this new system uouild work In this exampie. the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 70,000 machine-hours. In addition, capscity is 82,000 machine-hotirs and the actual activity for the year is 72,900 machine-hours. All of the manufacturing overhead is fixed and is 54.132,500 per yene. For simplicity, it is assumed that this is the estimated manufacturing ovethead for the year as well as the manufacturing overhead at capaciry and the actual amocme of manuficturing overhead for the yen. Job 706H, which required 300 machine-hours, is one of the jobs worked on during the year Required: a. Determine the predetermined overbead rate if the predetermined overbead rate is based on the amount of the allocation base at capacity 6. Detemine how much overtiead wosid be applied to Job 706H if the predetermined overhead rate is based on the aruoint of the allocation base at capacity. c. Detemine the underapplied or overapplied overthesd for the year if the predetermined overhead rate is based on the amomt of the allocation base at capacity