The predetermined overhead allocation rate for Fortune, Inc. is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000. Actual costs incurred were:
Direct materials $250,000
Direct labor 405,000
Indirect materials 55,000
Indirect labor 125,000
Sales commissions 50,000
Factory depreciation 170,000
Property taxes on factory 25,000
Factory utilities 35,000
Advertising 62,500
Factory equipment rental 100,000
Determine the amount of over - or underapplied overhead. Make sure you show how you calculated this number.