Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). In computing a predetermined overhead rate at the beginning of the year, the company's estimates were as follows: manufacturing overhead cost, $1,071,000; direct materials to be used in production, $630,000. The company's inventory accounts at the beginning and end of the year were as follows: Ending Raw Materials Work in Process Finished Goods Beginning $ 73,500 76,500 413,000 $ 21,300 163,000 273,000 The following actual costs were incurred during the year: Purchase of raw materials (all direct) Direct labour cost Manufacturing overhead costs: Indirect labour Property taxes Depreciation of equipment Maintenance Insurance Rent, building $497,000 96,500 183,000 49,300 273,000 96,300 8,300 193,000 Required: 1-a. Compute the predetermined overhead rate for the year. Predetermined overhead rate % 1-b. Compute the amount of under- or overapplied overhead for the year.