Star Company's accountants estimate total overhead for each month will be $64,000. They will allocate overhead on the basis of direct labor cost. During the current month, 3 jobs were worked on: Job 745 Job 746 Job 747 Direct material $36,000 $56,000 $24,000 Direct labour $56,000 $72,000 $40,000 Job 745 was completed and sold, Job 746 was completed and Job 747 is still in process. The budgeted direct labor cost for the month was $160,000 and the actual overhead was $65,800. The amount of over-or underapplied overhead for the month was: a) $1,400 overapplied. b) $1,800 underapplied. c) $4,848 overapplied. d) $8,000 underapplied.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...
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Financial accounting

Star Company's accountants estimate total overhead for each
month will be $64,000. They will allocate overhead on the basis of
direct labor cost. During the current month, 3 jobs were worked on:
Job 745 Job 746 Job 747
Direct material $36,000 $56,000 $24,000
Direct labour $56,000 $72,000 $40,000
Job 745 was completed and sold, Job 746 was completed and Job
747 is still in process. The budgeted direct labor cost for the month
was $160,000 and the actual overhead was $65,800.
The amount of over-or underapplied overhead for the month was:
a) $1,400 overapplied.
b) $1,800 underapplied.
c) $4,848 overapplied.
d) $8,000 underapplied.
Transcribed Image Text:Star Company's accountants estimate total overhead for each month will be $64,000. They will allocate overhead on the basis of direct labor cost. During the current month, 3 jobs were worked on: Job 745 Job 746 Job 747 Direct material $36,000 $56,000 $24,000 Direct labour $56,000 $72,000 $40,000 Job 745 was completed and sold, Job 746 was completed and Job 747 is still in process. The budgeted direct labor cost for the month was $160,000 and the actual overhead was $65,800. The amount of over-or underapplied overhead for the month was: a) $1,400 overapplied. b) $1,800 underapplied. c) $4,848 overapplied. d) $8,000 underapplied.
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