The predetermined overhead allocation rate for Newton, Inc., is based on estimated direct labor costs of $400,000 and estimated factory overhead of $800,000. Actual costs incurred were:

Indirect materials..	$17,000
Indirect labor..	13,000
Direct materials	75,000
Direct labor..	30,000
Advertising.	50,000
Factory depreciation	17,000
Factory Property taxes...	12,000
Sales Commissions .....	100,500

(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.