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Question(s) / Instruction(s):

A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $754,400, and actual direct labor hours were 92,000. What the amount is of over applied or under applied overhead at the end of the year?

a)            $34,400 over applied

b)            $18,400 over applied

c)            $34,400 under applied

d)            $18,400 under applied 

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