The predetermined overhead allocation rate for Lemke, Inc., is based on estimated direct labor costs of $250,000 and estimated factory overhead of $550,000. Actual costs incurred were:

Direct materials..	$250,000
Direct labor..	300,000
Indirect materials	155,000
Indirect labor..	225,000
Sales commissions.	50,000
Factory depreciation	170,000
Property taxes, factory...	115,000
Advertising.....	62,500

(a) Calculate the predetermined overhead rate and calculate the overhead applied during the year.

(b) Determine the amount of over- or underapplied overhead and state whether it was under or overapplied. Prepare the journal entry to eliminate the over- or underapplied overhead.