At the beginning of the year, Pryor Company estimated the following costs:

Overhead.................................$ 900,000

Direct labour cost........................1,200,000

Pryor uses normal costing and applies overhead on the basis of direct labour cost. (Direct labour cost is equal to total direct labour hours worked multiplied by the wage rate.) For the month of December, direct labour cost was $77,800.

Required:

1. Calculate the predetermined overhead rate for the year.

2. Calculate the overhead applied to production in December.