ABC Company applies overhead to jobs using direct labor cost as an activity. For the month of June, ABC Company estimated it would incur overhead cost of $25,000 while the actual overhead cost for June totaled $27,530. For June, ABC Company estimated it would incur direct labor cost of $40,000
While the actual direct labor cost for June totaled $38,000. For the month of June, overhead was:
underapplied by $3,780
underapplied by $2,530
underapplied by $33,270
overapplied by $3,780
overapplied by $2,530
overapplied by $33,270