The Winchester Company estimates that its overhead costs will amount to $595,000 and the company's manufacturing employees will work 85,000 direct labor hours during the current year.If actual overhead costs for the year amounted to $599,000 and actual labor hours amounted to 87,000,then overhead would be:
A) overapplied by $10,000.
B) underapplied by $10,000.
C) overapplied by $14,000.
D) underapplied by $4,000.

Question

Quizplus · Accepted Answer

Overhead was overapplied by $10,000 because the actual overhead costs were $4,000 less than the applied overhead costs.

The Winchester Company Estimates That Its Overhead Costs Will Amount