Sandross, Inc. applies overhead based on direct labor cost using a job-order costing system. The company estimated the following annual amounts: $\begin{array}{ll}
\text {Estimated manufacturing overhead }&\text {\$42,000 }\
\text {Estimated direct labor }&1,600 \text { hours at } \$ 15 \text { per hour }\
\text {Actual amounts for the year were: }\
\text {Actual manufacturing overhead }&\text { \$44,000}\
\text { Actual direct labor}&1,550 \text { hours at } \$ 16 \text { per hour }
\end{array}$
How much is over or underapplied overhead?

Question

Sandross, Inc. applies overhead based on direct labor cost using a job-order costing system. The company estimated the following annual amounts: $\begin{array}{ll}
\text {Estimated manufacturing overhead }&\text {\$42,000 }\
\text {Estimated direct labor }&1,600 \text { hours at } \$ 15 \text { per hour }\
\text {Actual amounts for the year were:  }\
\text {Actual manufacturing overhead }&\text { \$44,000}\
\text { Actual direct labor}&1,550 \text { hours at } \$ 16 \text { per hour }
\end{array}$
 How much is over or underapplied overhead?

Quizplus · Accepted Answer

The Answer of Sandross, Inc. applies overhead based on direct labor cost using a job-order costing system. The company estimated the following annual amounts: $\begin{array}{ll}
\text {Estimated manufacturing overhead }&\text {\$42,000 }\
\text {Estimated direct labor }&1,600 \text { hours at } \$ 15 \text { per hour }\
\text {Actual amounts for the year were:  }\
\text {Actual manufacturing overhead }&\text { \$44,000}\
\text { Actual direct labor}&1,550 \text { hours at } \$ 16 \text { per hour }
\end{array}$
 How much is over or underapplied overhead?

Sandross, Inc How Much Is Over or Underapplied Overhead? A) $600 Underapplied

Sandross, Inc How Much Is Over or Underapplied Overhead?
A) $600 Underapplied