Fancy Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.

Budgeted overhead $880,000

Actual overhead $910,000

Budgeted decorator hours 40,000

Actual decorator hours 41,000

The company uses Operating Overhead in place of Manufacturing Overhead.

(a) Compute the predetermined overhead rate

(b) Determine whether the overhead was under - or overapplied and by how much.