Problem:

Brickman Corporation, which began operations on January 1 of the current year, reported the following information:

• Esitmated Manufacturing Overhead $600,000
• Actual manufacturing overhead 639,000
• Estimated direct Labor cost 480,000
• Actual direct labor cost 500,000
• Total debits in the work in process account 1,880,000
• total credits in the work in process account 920,000

Brickman applies manufacturing overhead to jobs on the basis of direct labor cost and adds a 60% markup to the cost of completed production when finished goods are sold. On December 31, job no. 18 was the only job that remained in production. That job had direct-material and direct-labor charges of $16,500 and $36,000, respectively.

Required:

Question 1: Determine the company's predetermined overhead rate.

Question 2: Determine the amount of under- or overapplied overhead. Be sure to label your answer.