Kaplan Inc.applies overhead on the basis of direct labor hours.During 2016,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2016,which of the following would not be a reason for the underapplied overhead?

Question

Quizplus · Accepted Answer

If applied overhead is higher than actual overhead, there should be no underapplied overhead. Therefore, D is the correct choice as it is not a reason for underapplied overhead. A, B, and C are all possible reasons for underapplied overhead.