Sultan and Company makes rugs, selling them to furniture and carpet stores. During the most recent year, actual fixed and variable overhead were $245,000 and $603,250, respectively. Sultan applies overhead based on the number of rugs made at the rate of $87 per rug ($25 fixed and $62 variable). Sultan made 9,750 rugs during the most recent year.

Required:
a. What was the total amount of overhead applied during the most recent year?
b. Was total overhead underapplied or overapplied? By how much were variable overhead and fixed overhead underapplied or overapplied?