Chapter 4, Problem 4.11Q

To determine

Concept introduction:

Manufacturing costs can be divided into two categories based on its allocation; direct costs, indirect costs. Direct costs are directly traceable to a unit of production such as direct material cost and direct labor cost. Indirect costs are directly traceable to a unit of production such as indirect material cost and indirect labor cost. Indirect costs are also known as overhead costs.

To indicate: two reason of under applied overhead.