Luzadis Company makes furniture using the latest automated technology. The company uses a job order costing system and applies manufacturing overhead cost to products on the basis of machine hours- The predetermined overhead rate 1lavas based on a cost formula that estimates $1,040,000 of total manufacturing overhead for an estimated activity level of 80,000 machine-hours. During the year, a large quantity offurniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year. Machinehours ?1,000 Manufacturing overhead cost $ 900,000 Inventories at yearend: Flaw materials $ 11,000 l.ilorls: in process {includes overhead applied of $3,040) $ 156,000 Finished goods (includes overhead applied of $14?,680} $ 312,000 Cost of goods sold {includes overhead applied of $301,480} $ 1,482,000 Required: 1- Compute the underapplied or overapplied overhead