Question: XYZ Company applies overhead to jobs using direct labor cost as an activity. For the month of September, XYZ Company estimated it would use $13,600 of direct labor and incur $17,000 of manufacturing overhead cost. The actual results reported by XYZ Company for September included $11,500 in manufacturing overhead cost and $12,000 of direct labor. For the month of September, overhead was:
overapplied by $5,500
overapplied by $3,500
overapplied by $1,900
underapplied by $5,500
underapplied by $3,500
underapplied by $1,900