Pure Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.Estimated overhead

$920,000

Actual overhead

$942,800

Estimated decorator hours

40,000

Actual decorator hours

40,500

The company uses Operating Overhead in place of Manufacturing Overhead.Instructions

(a)Compute the predetermined overhead rate.

(b)Prepare the entry to apply the overhead for the year.

(c)Determine whether the overhead was under- or overapplied and by how much.