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Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The company estimates manufacturing overhead cost for the year to be $284,000

Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The company estimates manufacturing overhead cost for the year to be $284,000 and direct labor hours to be 20,000. Actual overhead and actual direct labor hours for the year were $345,000 and 25,400 hours, respectively.

2b. Will the accounts be increased or decreased to adjust for the over- or underapplied manufacturing overhead?

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