Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $2,048,000 of factory overhead costs and use 64,000 machine hours.

Erkens Company recorded the following events during the month of April:

a. Purchased 190,000 pounds of materials on account; the cost was $5.50 per pound.

b. Issued 125,000 pounds of materials to production, of which 17,500 pounds were used as indirect materials.

c. Incurred direct labor costs of $265,000 and $45,000 of indirect labor costs.

d. Recorded depreciation on equipment for the month, $76,700.

e. Recorded expired insurance costs for the manufacturing property, $4,000.

f. Paid $9,000 cash for utilities and other miscellaneous items for the manufacturing plant.

g. Completed Job H11 costing $8,000 and Job G28 costing $79,500 during the month and transferred them to the Finished goods inventory account.

h. Shipped Job G28 to the customer during the month. The job was invoiced at 35% above cost.

i. Used 8,700 machine hours during April.

Required:

1. Compute Erkens Company's predetermined overhead rate for the year.

2. Prepare journal entries to record the events that occurred during April.

3-a. Compute the amount of overapplied or underapplied overhead.

3-b. Prepare a journal entry to close overapplied or underapplied overhead into cost of goods sold on April 30.