Gordon Company is highly automated and uses computerized controllers in manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of the time recorded to complete each job by the computerized controllers attached to each machine. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

Machine time in hours		4,000
Manufacturing overhead cost	$	230,000

A severe economic recession resulted in cutting back production and a buildup of inventory in the companys warehouse. The companys cost records revealed the following actual cost and operating data for the year:

Machine time in hours		3,150
Manufacturing overhead cost	$	228,000
Inventories at year-end:
Raw materials	$	20,000
Work in process	$	32,000
Finished goods	$	530,000
Cost of goods sold	$	428,000

Required:

1. Compute the companys predetermined overhead rate for the year.

2. Compute the underapplied or overapplied overhead for the year.

3. Prepare the journal entry to show the disposal of under/overapplied overhead. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)