Newquay Company estimates that the factory overhead for the following year will be $800,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 32,000 hours. The total machine hours for the year were 34,800. The actual factory overhead for the year was $1,275,000.

a. Determine the total factory overhead amount applied. Round to the nearest dollar.

b. Compute the over- or underapplied amount for the year.

c. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold.