**O'Leary Corporation Overview**O'Leary Corporation specializes in manufacturing portable structures, intended for use at construction sites. The company adopts a traditional job costing system, paying direct labor at $30 per hour, although employees are not compensated for idle time. Manufacturing overhead is allocated to jobs using a predetermined rate based on direct labor-hours. Historically incurred manufacturing overhead costs, across two recent years, are outlined below, adjusted for current prices and wage rates.**Manufacturing Overhead Costs Overview**A table lists the direct labor-hours worked (69,600 in Year 1 and 56,600 in Year 2) and various incurred costs such as indirect labor, employee benefits, supplies, power, heat and light, supervision, depreciation, and property taxes and insurance. The total manufacturing overhead costs were $9,864,800 for Year 1 and $7,924,800 for Year 2.**Year 3 Job Status**At the start of Year 3, two jobs were not yet delivered:- **Job MC-270**: Completed on December 27, set to ship on January 7- **Job MC-275**: Still in progressFor overhead computations, O'Leary uses the previous year's actual overhead rate. The table details direct material costs and direct labor-hours for both jobs:- MC-270: $272,680 for 2,638 hours- MC-275: $497,680 for 3,138 hours**Year 3 Incurred Costs**During Year 3, O'Leary recorded:- Direct material costs of $11,842,600- Direct labor-hours totaling 76,680- Actual manufacturing overhead of $9,744,000**Jobs Not Yet Shipped by End of Year 3**Three jobs remain unfinished:- **MC-389** and **MC-398**: Finished- **MC-397** and **MC-399**: In progressA table provides details for each job's direct material costs, direct labor-hours, and job status.**Requirements and Problem-Solving**A series of financial and operational questions to resolve:a. Amounts for beginning Finished Goods and Work-in-Process accounts for Year 3?b. Total cost challenge for Job MC-275 with Year 3 used materials and labor.c. Analysis of over- or underapplied overhead for Year 3.d. Strategy for

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O'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only bullds to order (each unit is bullt to customer specifications). O'Leary uses a normal Job costing system. Direct labor at O'Leary Is paid $30 per hour, but the employees are not pald if they are not working on Jobs. Manufacturing overhead is assigned to Jobs by a predetermined rate on the basis of direct labor-hours. The company Incurred manufacturing overhead costs during two recent years adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked Manufacturing overhead costs incurred Indirect labor 69,6ee 56, 6ee $2, 264, 00e 849, e0e 566,000 548,e0e 143, 200 664, ese 2,86e, see 829, 250 $2,864, 00e 1,844, 00e 696,00e 653,000 Employee benefits Supplies Power Heat and light Supervision Depreciation Property taxes and insurance 143, 200 783,79e 2,86e, see s83,518 $9,848, 000 Total manufacturing overhead costs $7,924, 000 At the beginning of year 3, O'Leary has two Jobs, which have not yet been dellivered to customers. Job MC-270 was completed on December 27. year Ź It is scheduled to ship on January 7. year 3. Job MC-275 Is stll in progress. For the purpose of computing the predetermined overhead rate. O'Leary uses the previous year's actual overhead rate. Data on direct materlal costs and direct labor- hours for these jobs in year 2 follow. Job MC-270 $272,600 Job MC-275 $497,600 3,330 hours Direct material costs Direct labor-hours 2,638 hours During year 3, O'Leary Incurred the following direct material costs and direct labor-hours for all Jobs worked in year 3, Including the completion of Job Mć275. Direct material costs $11,842, Gee 76,6ee $ 9,744, 000 Direct labor-hours Actual manufacturing overhead At the end of year 3, there were four jobs that had not yet shipped. Data on these Jobs follow. MC-389 MC-398 $69,6ee MC-397 $106, 188 6,230 hours 1,430 hours In progress MC-399 $31,5ee Direct materials $45,8ee 1,766 hours Finished Direct labor-hours 2,830 hours Finished In progress Job status Required: a. What was the amount in the beginning Finished Goods and beginning Work-In-Process accounts for year 3? b. O'Leary Incurred direct materials costs of $59.600 and used an additional 560 hours In year 3 to complete Job MC-275. What was the final (total) cost charged to Job MC-275? c. What was over- or underapplied overhead for year 3?