Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $325,000 and machine hours to be 25,000. Actual manufacturing overhead and machine hours were $372,000 and 26,000, respectively.

Required:

1. Compute the predetermined overhead rate.

2. Compute applied manufacturing overhead.

3. Compute over- or underapplied manufacturing overhead.