Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: The overapplied or underapplied manufacturing overhead for the year was:
A) $3,000 underapplied
B) $3,000 overapplied
C) $12,000 underapplied
D) $12,000 overapplied

Question

Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were:  The overapplied or underapplied manufacturing overhead for the year was:
A) $3,000 underapplied 
B) $3,000 overapplied 
C) $12,000 underapplied 
D) $12,000 overapplied

Quizplus · Accepted Answer

The Answer of Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were:  The overapplied or underapplied manufacturing overhead for the year was:
A) $3,000 underapplied 
B) $3,000 overapplied 
C) $12,000 underapplied 
D) $12,000 overapplied

Precision Corporation Used a Predetermined Overhead Rate Last Year of $3