Dixon Company has a job-order costing system and applies manufacturing overhead cost to products based on machine hours. The following estimates were used in preparing the predetermined overhead rate for the most recent year: Machine Hours Manufacturing Overhead Cost 100,000 $2,000,000 During the most recent year, a severe recession in the company's industry caused the curtailment of production and a buildup of inventory in the company's warehouses. The company's cost records revealed the following actual cost and operating data for the year: Machine Hours Manufacturing Overhead Cost Balances in accounts at year-end: 80,000 $1,845,000 Work in process Finished goods Cost of goods sold Required: $200,000 $350,000 $1,450,000 Compute the company's predetermined overhead rate for the year and the amount of underapplied or overapplied overhead for the year.