Harvard Binding had budgeted direct labor costs of $870,000 and budgeted manufacturing overhead of $304,500. It allocates manufacturing overhead based on direct labor costs. If actual direct labor costs were $840,000 and actual manufacturing overhead costs were $286,000, identify the true statement.

Question

Quizplus · Accepted Answer

The company applied more overhead than it incurred because the overhead rate was based on budgeted costs, and the actual overhead incurred was less than the applied overhead.

Harvard Binding Had Budgeted Direct Labor Costs of $870,000 and Budgeted