If overhead is applied on the basis of direct labor hours, and actual hours worked...

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Accounting

If overhead is applied on the basis of direct labor hours, and actual hours worked are less than budgeted, which of the following is true, assuming estimated overhead is correct?

a. Overhead is probably overapplied.

b. Overhead is probably underapplied.

c. Applied overhead and actual overhead are equal.

d. None of these is true.

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