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 actual manufacturing overhead costs ($286,000) were less than the budgeted manufacturing overhead ($304,500), indicating that the overhead applied (based on the budgeted rate) was more than the actual overhead costs incurred.

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