Aster Inc., an electronic company, estimates a total factory overhead cost of $500,000 for the year and an activity base of 25,000 direct labor hours. Which of the following statements is correct if the actual labor hours are 29,000 and the actual factory overhead is $640,000?

a. The factory overhead is overapplied by $80,000.

b. The factory overhead is underapplied by $40,000.

c. The factory overhead is overapplied by $40,000.

d. The factory overhead is underapplied by $80,000.

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