Janson Inc. produces pickup truck bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $25.40 per machine hour was established for 2022.

Required:
a. If 5,000 machine hours were expected to be used during 2022, how much overhead was expected to be incurred?
b. Actual overhead incurred during 2022 totaled $132,650, and 5,100 machine hours were used during 2022. Calculate the amount of overapplied or underapplied overhead for 2022.
c. Explain the accounting necessary for the overapplied or underapplied overhead for the year.