The predetermined overhead allocation rate for Millay Manufacturing is based on estimated direct labor costs of $350,000 and estimated factory overhead of $770,000. Actual costs incurred were:

Direct materials	$475,000
Direct labor	347,000
Indirect materials	78,000
Indirect labor	143,500
Sales commissions	150,000
Factory depreciation	260,000
Property taxes, factory	35,000
Factory utilities	65,000
Advertising	62,500
Factory supervision	185,000

a. Calculate the predetermined overhead rate and calculate the overhead applied during the year. b. Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.