BizApp is a software development company that writes specialized programs for businesses. The founder and owner John Sprat runs the business on a "bare bones" philosophy, by reducing or eliminating unneeded activities in the company. As such, BizApp has only two departments (both of them classified as production departments): Design and Production.
Budgeted yearly information for these departments is as follows:
Design: 800 square feet; 6,000 direct labor hours, at $35/hour
Production: 1,600 square feet; 4,000 direct labor hours, at $25/hour
BizApp budgeted for the following overhead costs this year:
Rent and utilities are allocated to each department based on square footage, and other overhead costs are allocated based on direct labor hours. Design and Production overhead costs are allocated to jobs based on direct labor hours.
Suppose that, due to several significant unexpected contracts, BizApp had much higher levels of demand and production than anticipated. As such, John had to rent a larger office space, buy extra computers, and pay his manager more for working longer hours. At year-end, BizApp reported the following information:
What is the amount of over- or under-applied overhead at the end of the year? (Use the rounded amounts from Problem 1 where applicable)

Question

BizApp is a software development company that writes specialized programs for businesses. The founder and owner John Sprat runs the business on a "bare bones" philosophy, by reducing or eliminating unneeded activities in the company. As such, BizApp has only two departments (both of them classified as production departments): Design and Production. 
Budgeted yearly information for these departments is as follows:
Design: 800 square feet; 6,000 direct labor hours, at $35/hour
Production: 1,600 square feet; 4,000 direct labor hours, at $25/hour
BizApp budgeted for the following overhead costs this year:
  Rent and utilities are allocated to each department based on square footage, and other overhead costs are allocated based on direct labor hours. Design and Production overhead costs are allocated to jobs based on direct labor hours.
Suppose that, due to several significant unexpected contracts, BizApp had much higher levels of demand and production than anticipated. As such, John had to rent a larger office space, buy extra computers, and pay his manager more for working longer hours. At year-end, BizApp reported the following information:
  What is the amount of over- or under-applied overhead at the end of the year? (Use the rounded amounts from Problem 1 where applicable)

Quizplus · Accepted Answer

The Answer of BizApp is a software development company that writes specialized programs for businesses. The founder and owner John Sprat runs the business on a "bare bones" philosophy, by reducing or eliminating unneeded activities in the company. As such, BizApp has only two departments (both of them classified as production departments): Design and Production. 
Budgeted yearly information for these departments is as follows:
Design: 800 square feet; 6,000 direct labor hours, at $35/hour
Production: 1,600 square feet; 4,000 direct labor hours, at $25/hour
BizApp budgeted for the following overhead costs this year:
  Rent and utilities are allocated to each department based on square footage, and other overhead costs are allocated based on direct labor hours. Design and Production overhead costs are allocated to jobs based on direct labor hours.
Suppose that, due to several significant unexpected contracts, BizApp had much higher levels of demand and production than anticipated. As such, John had to rent a larger office space, buy extra computers, and pay his manager more for working longer hours. At year-end, BizApp reported the following information:
  What is the amount of over- or under-applied overhead at the end of the year? (Use the rounded amounts from Problem 1 where applicable)

BizApp Is a Software Development Company That Writes Specialized Programs