Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: $\begin{array}{lrr}&\text { Estimated }&\text { Actual }\
\text { Manufacturing overhead } & \$ 166,500 & \$ 165,000 \
\text { Direct labour hours } & 50,000 & 60,000
\end{array}$ The amount of over- or underapplied overhead for 2017 was:
A) $1,500 underapplied
B) $3,000 underapplied
C) $1,500 overapplied
D) $34,800 overapplied

Question

Quizplus · Accepted Answer

The Answer of Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: $\begin{array}{lrr}&\text { Estimated }&\text { Actual }\
\text { Manufacturing overhead } & \$ 166,500 & \$ 165,000 \
\text { Direct labour hours } & 50,000 & 60,000
\end{array}$ The amount of over- or underapplied overhead for 2017 was:
A) $1,500 underapplied
B) $3,000 underapplied
C) $1,500 overapplied
D) $34,800 overapplied

Collins Company Uses a Job Costing System and Allocates Overhead