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

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11ea7998_5f0e_d9d8_911b_f3682d4b9166_TB2627_00_TB2627_00 Reference: CH03-Ref1
On January 1, Schaf Corporation had $23,000 of raw materials on hand.During the month, the company purchased an additional $54,000 of raw materials.During January, $50,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $6,000.

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