orest Glade allocates overhead using direct labour$-$hours. For $2021,$ the estimated and actual labour$-$hours were $190,000$ and $172,000$ respectively, and the predetermined overhead rate used to apply overhead for the year was $$24\mathrm{.}80$ per direct labour$-$hour. The manufacturing overhead control T$-$account showed a credit balance of $$188,800$ at the end of the year, and this balance was disposed of at the end of the year by closing it to cost of goods sold.

Required:

$1.$ Was manufacturing overhead under$-$ or overapplied?

multiple choice $1$

Underapplied

Overapplied

$2.$ Compute the actual overhead amount incurred over the year.

$3.$ How will end$-$of$-$period disposal of this amount impact net income?

multiple choice $2$

Increase

Decrease