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XYZ Company applies overhead to jobs using direct labor cost as an activity. For the current year, XYZ's estimated overhead was $500,000 while the actual

XYZ Company applies overhead to jobs usingdirect labor costas an activity. For the

current year, XYZ's estimated overhead was $500,000 while the actual overhead cost

totaled $510,000. XYZ's estimated direct labor cost was $250,000 and the actual direct

labor cost amounted to $265,000. For the current year,overhead was:

1.under-applied by $10,000

2.under-applied by $15,000

3.under-applied by $20,000

4.under-applied by $25,000

5.over-applied by $10,000

6.over-applied by $15,000

7.over-applied by $20,000

8.over-applied by $25,000

9.none of the above are correct

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