XYZ Company applies overhead to jobs using direct labor cost as an activity. For the current year, XYZ Company's estimated overhead was $600,000 based on an expected 50,000 direct labor hours to be worked, with direct laborers expected to be paid $6 per hour. For the current year, XYZ's actual overhead costs totaled $620,000 and actual direct labor cost totaled $325,000. For the current year, overhead was: O under-applied by $20,000 over-applied by $22,000 O under-applied by $30,000 O over-applied by $20,000 O under-applied by $22,000 O over-applied by $30,000 none of the above choices are correct

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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XYZ Company applies overhead to jobs using direct labor cost
as an activity. For the current year, XYZ Company's estimated
overhead was $600,000 based on an expected 50,000 direct labor
hours to be worked, with direct laborers expected to be paid
$6 per hour. For the current year, XYZ's actual overhead costs
totaled $620,000 and actual direct labor cost totaled $325,000.
For the current year, overhead was:
O under-applied by $20,000
O over-applied by $22,000
O under-applied by $30,000
over-applied by $20,000
O under-applied by $22,000
O over-applied by $30,000
none of the above choices are correct
Transcribed Image Text:XYZ Company applies overhead to jobs using direct labor cost as an activity. For the current year, XYZ Company's estimated overhead was $600,000 based on an expected 50,000 direct labor hours to be worked, with direct laborers expected to be paid $6 per hour. For the current year, XYZ's actual overhead costs totaled $620,000 and actual direct labor cost totaled $325,000. For the current year, overhead was: O under-applied by $20,000 O over-applied by $22,000 O under-applied by $30,000 over-applied by $20,000 O under-applied by $22,000 O over-applied by $30,000 none of the above choices are correct
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