Gandars Associates produces carburetors for small engines and uses a normalcosting system. The following data are available for 2006: Budgeted: Overhead $4,500,000 Machine hours 187,500 Direct labor hours 600,000 Actual: Units produced 750,000 Overhead $4,466,250 Prime costs $6,750,000 Machine hours 187,875 Direct labor hours 585,000 Overhead is applied on the basis of direct labor hours.
Required:
1. What is the predetermined overhead rate?
2. What is the applied overhead for 2006?