Millison Manufacturing uses a normal costing system. 

Budgeted overhead for the coming year is $27,000,000. 

Expected actual activity is 90,000 direct labor hours. 

During the year, Millison worked a total of 91,000 direct labor hours and actual overhead totaled $27,200,000.

 Required

1. Compute the predetermined overhead rate for Millison Manufacturing.

2. Compute the applied overhead.

3. Compute the overhead variance, and label the variance as underapplied or over-applied overhead.

4. Explain why predetermined rates are used.