Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual direct labor hours and incurred $520,000 of actual manufacturing overhead costs. The Corporation had estimated that it would work 52,000 direct labor hours during the year and incur $468,000 of manufacturing overhead costs. The Corporation's manufacturing overhead cost for the year was: a. overapplied by $25,000. b. underapplied by $27,000. c. overapplied by $27,000. d. underapplied by $25,000.
Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual direct labor hours and incurred $520,000 of actual manufacturing overhead costs. The Corporation had estimated that it would work 52,000 direct labor hours during the year and incur $468,000 of manufacturing overhead costs. The Corporation's manufacturing overhead cost for the year was: a. overapplied by $25,000. b. underapplied by $27,000. c. overapplied by $27,000. d. underapplied by $25,000.
Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter3: Cost Behavior
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Problem 30E: Natur-Gro, Inc., manufactures composters. Based on past experience, Natur-Gro has found that its...
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![Sawyer Manufacturing Corporation uses a predetermined overhead rate
based on direct labor hours to apply manufacturing overhead to jobs. Last
year, the Corporation worked 55,000 actual direct labor hours and incurred
$520,000 of actual manufacturing overhead costs. The Corporation had
estimated that it would work 52,000 direct labor hours during the year and
incur $468,000 of manufacturing overhead costs.
The Corporation's manufacturing overhead cost for the year was:
a. overapplied by $25,000.
b. underapplied by $27,000.
c. overapplied by $27,000.
d. underapplied by $25,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb235db1b-eb90-4443-8333-726bbd062457%2F66ec0746-64e9-432b-8265-47de6ad9adcd%2Fn88bz7f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sawyer Manufacturing Corporation uses a predetermined overhead rate
based on direct labor hours to apply manufacturing overhead to jobs. Last
year, the Corporation worked 55,000 actual direct labor hours and incurred
$520,000 of actual manufacturing overhead costs. The Corporation had
estimated that it would work 52,000 direct labor hours during the year and
incur $468,000 of manufacturing overhead costs.
The Corporation's manufacturing overhead cost for the year was:
a. overapplied by $25,000.
b. underapplied by $27,000.
c. overapplied by $27,000.
d. underapplied by $25,000.
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