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Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $406,800; materials of $416,000 and direct labor of $225,000. During the year Adams incurred $430,000 in materials costs, $424,600 in overhead costs and $230,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year. Multiple Choice O O O O O $10,600 overapplied. $5,400 underapplied. $17,800 overapplied. $17,800 underapplied. $10,600 underapplied.

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