Exercise 3–34 Overapplied or Underapplied Overhead (LO 3-4, 3-5) The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 435.000 Actual manufacturing overhead: Depreciation $231,000 Property taxes 21,000 Indirect labor 82,000 Supervisory salaries 200,000 Utilities 59,000 Insurance 30,000 Rental of space 300,000 Indirect material (see data below) 79,000 Indirect material: Beginning inventory, January 1 48,000 Purchases during the year 94,000 Ending inventory, December 31 63,000 Required: 1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours. 2. Calculate the overapplied or underapplied overhead for the year. 3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.