Accounting question ACCT 204

Your Company uses a predetermined overhead rate based on direct labor hours. The POR is $10 per direct labor hour. Use the following information to determine by how much the manufacturing overhead cost for the current year will be over or under applied. Direct labor-hours: Estimated for the year 24,000 Actual hours worked 24,750 Direct labor cost: Estimated for the year $300,000 Actual cost incurred $210,000 Manufacturing overhead: Estimated for the year $240,000 Actual cost incurred $245,000 The manufacturing overhead cost for the current year will be: $7,500 over applied $2,500 over applied $7,500 under applied $2,500 under applied