On January 1, 2014, Abbot Company estimated that its total overhead costs for the coming year would be $323,000 and that it would make 34,000 units of product. Abbot actually produced 34,600 units of product and incurred actual overhead costs of $319,000 during 2014.

Required
a. Calculate Abbot’s predetermined overhead rate based on expected costs and production.
b. Determine whether overhead was overapplied or underapplied during 2014.
c. Explain how the entry to close the Manufacturing Overhead account will affect the Cost of Goods Sold account.