Avatar Corporation uses a predetermined rate to apply overhead. At the beginning of the year, Avatar estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. Actual overhead costs incurred were $255,500, actual direct labor hours were 41,000, and actual machine hours were 11,000.

What is the overhead application rate used by Avatar? (e.g., $xx)

What is the amount of variance between actual and applied overhead? (Note: enter as a positive number; do not worry about whether the amount is over or under-applied)