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: Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per computer-hour 89,000 $1,275,000 $3.90 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 Manufacturing overhead cost Inventories at year-end 50,000 $ 975,000 Raw materials Work in process (includes overhead applied of 72,920) Finished goods (includes overhead applied of 273,450) $ 450,000 $ 170,000 $1,000,000 $ 2,720,000 Cost of goods sold (includes overhead applied of 565,130 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.) Underapplied overhead cost