Predetermined Overhead Rates
Aspen Company estimates its manufacturing overhead to be $625,000 and its direct labor costs to be $500,000 for year 2. Aspen worked on three jobs for the year. Job 2 1, which was sold during year 2, had actual direct labor costs of $195,000. Job 2 2, which was completed, but not sold at the end of the year, had actual direct labor costs of $325,000. Job 2 3, which is still in work in process inventory, had actual direct labor costs of $130,000. Actual manufacturing overhead for year 2 was $825,000. Manufacturing overhead is applied on the basis of direct labor costs.
Required
a. How much overhead was applied to each job in year 2?
b. What was the over or underapplied manufacturing overhead for year 2?