Question: A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it was estimated that overhead costs would be $450,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $459,000 and actual direct labor hours were 95,000. What is the amount of overapplied or underapplied overhead at the end of the year? A. $16,000 overapplied B. $16,000 underapplied C. $9,000 overapplied

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...
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Overapplied Or Underupplied?

Question:
A manufacturing company applies overhead based on direct labor hours. At the beginning of the
year, it was estimated that overhead costs would be $450,000 and direct labor hours would be
90,000. Actual overhead costs incurred were $459,000 and actual direct labor hours were 95,000.
What is the amount of overapplied or underapplied overhead at the end of the year?
A. $16,000 overapplied
B. $16,000 underapplied
C. $9,000 overapplied
Transcribed Image Text:Question: A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it was estimated that overhead costs would be $450,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $459,000 and actual direct labor hours were 95,000. What is the amount of overapplied or underapplied overhead at the end of the year? A. $16,000 overapplied B. $16,000 underapplied C. $9,000 overapplied
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