Underapplied or overapplied overhead The following cost and production estimates were made by Karagoz Company prior to the start of the accounting year:

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Direct labor cost $320,000 Manufacturing overhead 560,000 Direct labor hours 80,000 Machine hours.... 40,000 Production in units 500,000 By the end of the year the following actual data were recorded: Units produced... Machine hours used 400,000 32,000 Direct labor hours used 70,000 Direct labor cost .... $280,000 Direct material cost 800,000 Manufacturing overhead .. 462,000