A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?
A) $6,000 overapplied
B) $6,000 underapplied
C) $54,800 overapplied
D) $54,800 underapplied

Question

Quizplus · Accepted Answer

The Answer of A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?
A) $6,000 overapplied
B) $6,000 underapplied
C) $54,800 overapplied
D) $54,800 underapplied

A Manufacturing Company Applies Factory Overhead Based on Direct Labor