Terrence Industries charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labor hours. The following data pertain to the current year:

Which of the following choices is the correct status of manufacturing overhead at year-end?
A) Overapplied by $10,000.
B) Underapplied by $10,000.
C) Overapplied by $35,000.
D) Underapplied by $35,000.
E) Overapplied by $45,000.

Question

Terrence Industries charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labor hours. The following data pertain to the current year:

Which of the following choices is the correct status of manufacturing overhead at year-end?
A) Overapplied by $10,000. 
B) Underapplied by $10,000. 
C) Overapplied by $35,000. 
D) Underapplied by $35,000. 
E) Overapplied by $45,000.

Quizplus · Accepted Answer

The Answer of Terrence Industries charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labor hours. The following data pertain to the current year:

Which of the following choices is the correct status of manufacturing overhead at year-end?
A) Overapplied by $10,000. 
B) Underapplied by $10,000. 
C) Overapplied by $35,000. 
D) Underapplied by $35,000. 
E) Overapplied by $45,000.

Terrence Industries Charges Manufacturing Overhead to Products by Using a Predetermined