Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were:
Actual manufacturing overhead cost incurred $ \quad $ $ \quad $ $ \quad $ $ 47,000
Actual direct labour hours worked $ \quad $ $ \quad $ $ \quad $ $ \quad $ $ \quad $ $ \quad $ 24,000
What was the under- or overapplied overhead last year?
A) $1,000 under applied.
B) $1,000 over applied.
C) $2,000 under applied.
D) $3,000 over applied.

Question

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were: 
Actual manufacturing overhead cost incurred $ \quad $ $ \quad $ $ \quad $   $ 47,000
Actual direct labour hours worked  $ \quad $ $ \quad $ $ \quad $ $ \quad $ $ \quad $ $ \quad $ 24,000
What was the under- or overapplied overhead last year?
A) $1,000 under applied.
B) $1,000 over applied.
C) $2,000 under applied.
D) $3,000 over applied.

Quizplus · Accepted Answer

The Answer of Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were: 
Actual manufacturing overhead cost incurred $ \quad $ $ \quad $ $ \quad $   $ 47,000
Actual direct labour hours worked  $ \quad $ $ \quad $ $ \quad $ $ \quad $ $ \quad $ $ \quad $ 24,000
What was the under- or overapplied overhead last year?
A) $1,000 under applied.
B) $1,000 over applied.
C) $2,000 under applied.
D) $3,000 over applied.

Beaver Company Used a Predetermined Overhead Rate Last Year of $2