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Southwestern Fashions, Inc. which uses a job-order costing system, had two jobs in process at the start of the year: job no. 101 ($84,000) and job no. 102 ($53,300). The following information is available:

a.	The company applies manufacturing overhead on the basis of machine hours (based on practical capacity). Budgeted overhead and machine activity for the year were anticipated to be $824,000, and 16,000 hours, respectively.
b.	The company worked on four jobs during the first quarter. Direct materials used, direct labor incurred, and machine hours consumed were as follows:

Job No.	Direct Material	Direct Labor	Machine Hours
101	$21,000	$35,000	1,200
102		22,000	700
103	44,000	65,000	2,000
104	15,000	8,800	500

c.	Manufacturing overhead during the first quarter included charges for depreciation ($33,000), indirect labor ($60,000), indirect materials used ($5,200), and other factory costs ($139,600).
d.	Southwestern Fashions completed job no. 101 and job no. 102. Job no. 102 was sold on account, producing a profit of $34,800 for the firm.

4.	Did the finished-goods inventory increase or decrease during the first quarter? By how much?

5.	Was manufacturing overhead under- or overapplied for the first quarter of the year? By how much?

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