3-3B – Predetermined Overhead Rate, Overapplied and Underapplied Overhead Jake’s Autobody is a car repair shop. The company uses direct labour cost as a basis for applying manufacturing overhead costs to jobs. The company estimates its annual overhead to be $140,000 and it expects employees to work 20,000 hours at an average wage rate of $12 per hour. During the year, employees actually worked 18,000 hours (at a wage rate of $12.25 per hour) and the actual amount spent on overhead was $150,000. Required: a.) Compute the predetermined overhead rate. b.) How much overhead would be applied to jobs during the year? c.) By how much was overhead overapplied or underapplied for the year?