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Question - Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $416,100; materials of $409,000 and direct labor of $219,000. During the year Adams incurred $439,500 in materials costs, $434,800 in overhead costs and $223,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
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