Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: 85,000 Machine-hours 1,273,000 Fixed manufacturing overhead cost Variable manufacturing overhead per computer-hour 3.60 During the year, a glut of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Machine-hours 40,000 Manufacturing overhead cost 810,000 Inventories at year-end: 420,000 Raw materials 110,000 Work in process (includes overhead applied of 44,592) 1,020,000 Finished goods (includes overhead applied of 193,232) 2,740,000 Cost of goods sold (includes overhead applied of 505,376) Required: 1. Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places. Predetermined overhead rate per hour 2. Compute the underapplied or overapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)