Exercise 3-35 Overapplied or Underapplied Overhead (LO 3-4, 3-5) The following information pertains to Paramus Metal Works for the year just ended. Budgeted drect-labor cost: 80,000 hours (practical capacity) at $18 per hour Actua' direct-labor cost 83,000 hours at $20 per hour Budgeted manutacturing overhead. $1,040,000 Budgeted sell ng and adm nistrative expenses. S438,000 Actual manufacturing overhead Depreciation Property taxes Indirect labo $250,000 21,000 82,000 *. 220,000 Supervisory salarles 61,000 34,000 310,000 80,000 Utiities * Insurance Rental of space Indirect material (see data belcw Indirect material: 48,000 Beginning inventory, January 1 Purchases dusring the year 102,000 Ending inventory, Dacember 3 70,000 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. 4. Build a spreadsheet: Construct an Excel spreadsheet to solve requirements (1) and (2) above. Show how the solution will change if the following data change: budgeted manufacturing overhead was $990,000, property taxes were $25,000, and purchases of indirect material amounted to $97,000