ER JO002 * Solids Co. uses a normal cost accounting system. Budgeted costs for the year were $4 per kilogram of direct materials and $15 per direct labour hour. Overhead was applied at a rate of $20 per machine hour. Budgeted production activity was 20,000 machine hours for the year. During the year, the following were actually incurred for manufacturing: Kilograms of direct materials used 65,000 Direct labour hours incurred 15,000 Machine hours incurred 19.000 Direct materials costs $200.000 Direct labour costs $247.000 Factory overhead costs $358.000 How much was overhead over-applied or under-applied during the year? $22,000 under-applied $22,000 over-applied $58,000 under-applied $58,000 over-applied