Fortune Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.
$\begin{array}{lrr}
\text { On October } 1 \text {, the estimates for the month were: }\
\text { Manufacturing overhead } &\$17,000\
\text {Direct labor-hours } &13,600\
\text {During October; the actual results were: } &\
\text { Manufacturing overhead } &\$18,500\
\text {Direct labor-hours } &12,000\
\end{array}$

The cost records for October will show:
A) Overapplied overhead of $1,500.
B) Underapplied overhead of $1,500.
C) Overapplied overhead of $3,500.
D) Underapplied overhead of $3,500.

Question

Fortune Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.
$\begin{array}{lrr}
\text { On October } 1 \text {, the estimates for the month were: }\
  \text { Manufacturing overhead } &\$17,000\
 \text {Direct labor-hours  } &13,600\
 \text {During October; the actual results were:  } &\
 \text { Manufacturing overhead } &\$18,500\
 \text {Direct labor-hours  } &12,000\
\end{array}$

The cost records for October will show:
A) Overapplied overhead of $1,500.
B) Underapplied overhead of $1,500.
C) Overapplied overhead of $3,500.
D) Underapplied overhead of $3,500.

Quizplus · Accepted Answer

The Answer of Fortune Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.
$\begin{array}{lrr}
\text { On October } 1 \text {, the estimates for the month were: }\
  \text { Manufacturing overhead } &\$17,000\
 \text {Direct labor-hours  } &13,600\
 \text {During October; the actual results were:  } &\
 \text { Manufacturing overhead } &\$18,500\
 \text {Direct labor-hours  } &12,000\
\end{array}$

The cost records for October will show:
A) Overapplied overhead of $1,500.
B) Underapplied overhead of $1,500.
C) Overapplied overhead of $3,500.
D) Underapplied overhead of $3,500.

Fortune Company Uses a Predetermined Overhead Rate Based on Direct