Checker Inc. produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $12.70 per machine hour was established for 2019.

Required:

a. If 9,000 machine hours were expected to be used during 2019, how much overhead was expected to be incurred?

b. Actual overhead incurred during 2019 totaled $121,650, and 9,100 machine hours were used during 2019. Calculate the amount of over- or underapplied overhead for 2019.

c. Explain the accounting necessary for the over- or underapplied overhead for the year.