Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $404,700; materials of $403,000 and direct labor of $213,000. During the year Adams incurred $428,100 in materials costs, $424,000 in overhead costs and $217,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.

Multiple Choice

• $11,700 overapplied.

• $19,300 overapplied.

• $11,700 underapplied.

• $19,300 underapplied.

• $4,100 underapplied.