Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during 2017: direct materials costs, $680,000; direct labor costs, $3,300,000; and factory overhead costs applied, $2,310,000.

1.Determine the company's predetermined overhead rate for 2017.

2.Assuming that the company's $74,000 ending Work in Process Inventory account for 2017 had $23,000 of direct labor costs, determine the inventory's direct materials costs.