Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during the year: direct materials costs, $800,000; direct labor costs, $4,500,000; and factory overhead costs applied, $3,150,000.

1. Determine the companys predetermined overhead rate for the year. 2. Assuming that the companys $86,000 ending Work in Process Inventory account for the year had $35,000 of direct labor costs, determine the inventorys direct materials costs.