A company applies manufacturing overhead costs to products based on direct labor hours. The annual estimated manufacturing overhead is $290,000 and estimated direct labor hours is 20,000. The actual annual overhead and actual direct labor hours is $360,000 and 26,000 hours.

1. figure out if overhead is over or underapplied and compute.
2. which accounts will be affected by the over or underapplied manufacturing overhead?
3. will the accounts be increased or decreased to adjust the manufacturing overhead?