6 Shire Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its total manufacturing overhead cost at $400,000 and its direct labour hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. What would be the manufacturing overhead for the year? Select one: a. $10,000 underapplied b. $50,000 underapplied c. $50,000 overapplied d. $10,000 overapplied
6 Shire Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its total manufacturing overhead cost at $400,000 and its direct labour hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. What would be the manufacturing overhead for the year? Select one: a. $10,000 underapplied b. $50,000 underapplied c. $50,000 overapplied d. $10,000 overapplied
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6
Shire Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its total manufacturing overhead cost at $400,000 and its direct labour hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. What would be the manufacturing overhead for the year?
Select one:
a. $10,000 underapplied
b. $50,000 underapplied
c. $50,000 overapplied
d. $10,000 overapplied
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