Computing Over- or Underapplied Overhead

A manufacturing company budgeted for $1,240,000 in manufacturing overhead and expected 400,000 direct labor hours. Actual overhead was $1,200,000, and direct labor hours were 390,000. Was manufacturing overhead over- or underapplied and by how much?

Overapplied by $9,000
Underapplied by $9,000
Overapplied by $40,000
Underapplied by $40,000

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