Answer:
Instructions are below.
Explanation:
F<u>irst, we need to calculate the predetermined overhead rate:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 625,000/500,000
Predetermined manufacturing overhead rate= $1.25 per direct labor dollar
<u>Now, we allocate overhead to each Job:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Job 2-1= 1.25*195,000= 243,750
Job 2-2= 1.25*325,000= 406,250
Job 2-3= 1.25*130,000= 162,500
Total allocated overhead= $812,500
<u>Finally, the under/over allocation overhead:</u>
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 800,000 - 812,500
Under/over applied overhead= $12,500 overallocated