The following accounts are from last year's books at Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs.What is the manufacturing overapplied or underapplied for the year?
A)$6,000 underapplied
B)$6,000 overapplied
C)$26,000 underapplied
D)$26,000 overapplied

Question

The following accounts are from last year's books at Sharp Manufacturing:       Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs.What is the manufacturing overapplied or underapplied for the year?
A)$6,000 underapplied 
B)$6,000 overapplied 
C)$26,000 underapplied 
D)$26,000 overapplied

Quizplus · Accepted Answer

To calculate the manufacturing overhead applied, we need to sum up the direct labor costs for all jobs and multiply that by the predetermined overhead rate. However, we are not given any information about the direct labor costs incurred, so we cannot calculate the manufacturing overhead applied. Therefore, we cannot determine the overapplied or underapplied amount for the year. The correct answer is B, as none of the answer choices is correct. The manufacturing overhead is overapplied by $6,000 because the manufacturing overhead applied of $210,000 exceeds the manufacturing overhead incurred by $6,000.

The Following Accounts Are from Last Year's Books at Sharp