Calculating applied overhead Fanny, Inc., estimates manufacturing overhead costs for the 2007 accounting period as follows.

The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in 2007 were 200,000 and for machines were 125,000.
Required

a. Calculate the predetermined overhead rate.

b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the 2007 period if actual machine hours were 140,000.