Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $400,000, and direct labor costs to be $2,000,000. Actual overhead costs for the year totaled $380,000, and actual direct labor costs totaled $1,800,000. At year-end, Factory Overhead is:

Question 19Select one:

a.

Underapplied by $200,000

b.

Overapplied by $20,000

c.

Underapplied by $20,000

d.

Overapplied by $200,000

e.

Neither overapplied nor underapplied