Swifty Manufacturing Company, a small manufacturer of appliance parts, has just completed its first year of operations. The companys controller, Vic Trainor, has been reviewing the results for the year and is concerned about the application of factory overhead. Trainor is using the following information to assess operations.

Swifty uses several machines with a combined cost of $2,300,000 and no residual value. Each machine has an output of 6 units of product per hour and a useful life of 29,000 machine hours.

Selected actual data on Swiftys operations for the year just ended are as follows: Products manufactured 699,000units Machine use 173,000hours Direct labor 39,000hours Labor rate $15per hour Total factory overhead $1,150,000 Cost of Goods Sold $1,734,160 Finished Goods Inventory (year-end)$446,240 Work in Process Inventory (year-end)$0

Total factory overhead is applied based on direct labor cost using a predetermined plantwide rate.

Budgeted activity for the year included 29 employees each working 1,900 productive hours per year to produce 826,500 units of product. Because the machines are highly automated, each employee can operate two to four machines simultaneously. Normal activity is for each employee to operate three machines. Machine operators are paid $15 per hour. Overhead was budgeted at $961,200. What is the predetermined overhead rate %?

Based on Swifty Manufacturing Companys actual operations over the past year, was manufacturing overhead underapplied or overapplied? By how much?