Hudson,Inc.has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year.If direct labor hours for the year total 18,000 and actual factory overhead totals $350,000,what is the amount of overapplied or underapplied overhead for the year?

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The predetermined overhead rate is $20 per direct labor hour ($400,000 / 20,000 hours). Applied overhead is $360,000 (18,000 hours x $20). Actual overhead is $350,000, so overhead is overapplied by $10,000 ($360,000 - $350,000).