The following information was gathered for Badgers Company: $\begin{array}{ll}
\text { Budgeted dir ect-labor hours } & 31,000 \
\text { Actual dir ect- lab or hours } & 32,400 \
\text { Budgeted factory overhead } & \$ 147,250 \
\text { Actual factory overhead } & \$ 149,980
\end{array}$ Assume the cost driver is direct- labor hours. The amount of over/underapplied overhead is:

Question

Quizplus · Accepted Answer

The amount of over/underapplied overhead is calculated as the difference between the actual factory overhead and the budgeted factory overhead, multiplied by the actual direct-labor hours. In this case, the actual factory overhead is $149,980, the budgeted factory overhead is $147,250, and the actual direct-labor hours are 32,400. Therefore, the amount of over/underapplied overhead is ($149,980 - $147,250) x 32,400 = $2,730 overapplied.

The Following Information Was Gathered for Badgers Company Assume the Cost Driver Is Direct- Labor Hours