The predetermined overhead allocation rate for Forsythe, 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...........................................410,000

Indirect materials.....................................55,000

Indirect labor........................................125,000

Sales commissions....................................50,000

Factory depreciation...............................170,000

Property taxes, factory...............................15,000

Factory utilities.......................................35,000

Advertising............................................62,500

Factory equipment rental..........................100,000

(a) Calculate the predetermined overhead rate and calculate the overhead applied during the year.

(b) Determine the amount of over- or under-applied overhead and prepare the journal entry to eliminate the over- or under-applied overhead assuming that it is not material in amount.