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A manufacturing company budgeted for $1,240,000 in manufacturing overhead and expected 400,000direct labor hours. Actual overhead was $1,200,000, and actual direct labor hours were 390,000.

A manufacturing company budgeted for $1,240,000 in manufacturing overhead and expected 400,000direct labor hours. Actual overhead was $1,200,000, and actual direct labor hours were 390,000.

Was manufacturing overhead over- or underapplied and by how much?

Overapplied by $9,000

Underapplied by $9,000

Overapplied by $40,000

Underapplied by $40,000

Please explain why it would be overapplied or underapplied.

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