Island Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $375,000 and budgeted machine-hours were 12,500. Actual factory overhead was $387,920 and actual machine-hours were 13,150.

Required:

a. Compute the overhead application rate.

b. Compute the amount of overhead applied to production.

c. Determine the amount of over- or underapplied overhead.