(Appendix 11A)Dexter Corporation uses a standard cost system and applies manufacturing overhead cost to units of product on the basis of standard direct labor-hours (DLHs).Information on Dexter Corporation's manufacturing overhead costs for last period is given below: Given these data, the underapplied or overapplied overhead cost for the period would be:
A)$10, 000 overapplied
B)$2, 000 overapplied
C)$10, 000 underapplied
D)$8, 000 underapplied

Question

(Appendix 11A)Dexter Corporation uses a standard cost system and applies manufacturing overhead cost to units of product on the basis of standard direct labor-hours (DLHs).Information on Dexter Corporation's manufacturing overhead costs for last period is given below:  Given these data, the underapplied or overapplied overhead cost for the period would be:
A)$10, 000 overapplied 
B)$2, 000 overapplied 
C)$10, 000 underapplied 
D)$8, 000 underapplied

Quizplus · Accepted Answer

Overhead applied = Predetermined overhead rate × Standard hours allowed for the actual output
= $4 per DLH × 38, 000 DLHs = $152, 000
Overhead is overapplied by $2, 000 because the actual overhead cost incurred was $150, 000.

(Appendix 11A)Dexter Corporation Uses a Standard Cost System and Applies