Medusa Products uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would work 88,800 machine-hours and incur $346,320 in manufacturing overhead costs for the year.

Required:

1. Compute the company's predetermined overhead rate. (Round your answer to 2 decimal places.)

Predetermined overhead rate

...............................

Per MH

2. Assume that during the year the company actually worked only 81,900 machine-hours and incurred $340,000 of manufacturing overhead costs. Compute the amount of underapplied or overapplied overhead for the year. (Round your intermediate calculation to 2 decimal places.)