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:
A. Determine the company's predetermined overhead rate.
B. Determine the amount of under- or overapplied overhead. Be sure to label your answer.