How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much?

1. Overhead incurred during the year;

= Depreciation on manufacturing plant and equipment + Property taxes on plant + Plant Janitors wages

= 485,000 + 19,000 + 9,500

= $513,500

2. The under or over allocation depends on how much manufacturing overhead was allocated to jobs for the year.

= Actual machine hours * Overhead rate

Overhead rate = Manufacturing overhead cost / Allocated Machine hours

= 570,000 / 71,250

= $8

Allocated Manufacturing Overhead = 57,000 * 8

= $456,000

The allocated manufacturing overhead is more than the actual overhead. This means that it is Underallocated and the company did not budget enough for the overheads.

Underallocation = 513,500 - 456,000

= $57,500