Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $300,000, and direct labor costs to be $150,000. Actual overhead costs for the year totaled $330,000, and actual direct labor costs totaled $170,000.
-At year-end, Factory Overhead account is:
A) Overapplied by $20,000.
B) Neither overapplied nor underapplied.
C) Overapplied by $170,000.
D) Overapplied by $10,000.
E) Underapplied by $10,000.

Question

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $300,000, and direct labor costs to be $150,000. Actual overhead costs for the year totaled $330,000, and actual direct labor costs totaled $170,000. 
-At year-end, Factory Overhead account is:
A) Overapplied by $20,000.
B) Neither overapplied nor underapplied.
C) Overapplied by $170,000.
D) Overapplied by $10,000.
E) Underapplied by $10,000.

Quizplus · Accepted Answer

The Answer of Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $300,000, and direct labor costs to be $150,000. Actual overhead costs for the year totaled $330,000, and actual direct labor costs totaled $170,000. 
-At year-end, Factory Overhead account is:
A) Overapplied by $20,000.
B) Neither overapplied nor underapplied.
C) Overapplied by $170,000.
D) Overapplied by $10,000.
E) Underapplied by $10,000.

Mango Company Applies Overhead Based on Direct Labor Costs