Tombert Decorating uses normal costing in assigning overhead costs. Overhead is applied based on the number of decorator hours. For the upcoming year, overhead costs are estimated at $960,000 and decorator hour usage is estimated at 40,000. During the year, $984,150 actual overhead costs were incurred and 40,500 actual decorator hours were used. Instruction

a. Compute the pre-determined overhead rate for the year.

b. Prepare the entry to apply the overhead costs to production for the year.

c. Determine whether the overhead was under or over-applied and by how much.