Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour, based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were: $$\begin{array} { | l | l | }
\hline \text { Actual manufacturing overhead cost incurred } & \$ 47,000 \
\hline \text { Actual direct labour hours worked } & 24,000 \
\hline
\end{array}$$ The underapplied or overapplied overhead last year was:
A)$2,000 underapplied.
B)$3,000 overapplied.
C)$1,000 underapplied.
D)$1,000 overapplied.

Question

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour, based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were: $$\begin{array} { | l | l | } 
\hline \text { Actual manufacturing overhead cost incurred } & \$ 47,000 \
\hline \text { Actual direct labour hours worked } & 24,000 \
\hline
\end{array}$$ The underapplied or overapplied overhead last year was:
A)$2,000 underapplied.
B)$3,000 overapplied.
C)$1,000 underapplied.
D)$1,000 overapplied.

Quizplus · Accepted Answer

The Answer of Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour, based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were: $$\begin{array} { | l | l | } 
\hline \text { Actual manufacturing overhead cost incurred } & \$ 47,000 \
\hline \text { Actual direct labour hours worked } & 24,000 \
\hline
\end{array}$$ The underapplied or overapplied overhead last year was:
A)$2,000 underapplied.
B)$3,000 overapplied.
C)$1,000 underapplied.
D)$1,000 overapplied.

Beaver Company Used a Predetermined Overhead Rate Last Year of $2