Two jobs were worked on during the year: Job A-101 and Job A-102.The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,200 and 1,000,respectively.The actual manufacturing overhead was $37,000.What is the amount of the under- or overapplied manufacturing overhead? $$\begin{array} { | l | r | }
\hline \text { Estimated manufacturing overhead for the year } & \$ 30,000 \
\hline \text { Estimated direct labor hours for the year } & 2,000 \
\hline
\end{array}$$

Question

Two jobs were worked on during the year: Job A-101 and Job A-102.The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,200 and 1,000,respectively.The actual manufacturing overhead was $37,000.What is the amount of the under- or overapplied manufacturing overhead? $$\begin{array} { | l | r | } 
\hline \text { Estimated manufacturing overhead for the year } & \$ 30,000 \
\hline \text { Estimated direct labor hours for the year } & 2,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Using the formula for calculating manufacturing overhead:

Actual Manufacturing Overhead - (Predetermined Overhead Rate x Actual Direct Labor Hours) = Manufacturing Overhead Applied

$37,000 - ($15 x 2,200) = $4,000 underapplied. Therefore, Choice C is the correct answer.

Two Jobs Were Worked on During the Year: Job A-101