Paul Company used a predetermined overhead rate during the year just completed of $3.50 per direct labor-hour,based on an estimate of 22,000 direct labor-hours to be worked during the year.Actual overhead cost and activity during the year were: $\begin{array}{llcc}
\text { Actual manufacturing overhead cost incurred } &\$90,000 \
\text {Actual direct labor-hours worked } &25,000
\end{array}$
The underapplied or overapplied overhead for the year would be:
A)$13,000 underapplied
B)$10,500 overapplied
C)$2,500 overapplied
D)$2,500 underapplied

Question

Paul Company used a predetermined overhead rate during the year just completed of $3.50 per direct labor-hour,based on an estimate of 22,000 direct labor-hours to be worked during the year.Actual overhead cost and activity during the year were: $\begin{array}{llcc}
  \text {  Actual manufacturing overhead cost incurred } &\$90,000  \
\text {Actual direct labor-hours worked  } &25,000
\end{array}$
  The underapplied or overapplied overhead for the year would be:
A)$13,000 underapplied
B)$10,500 overapplied
C)$2,500 overapplied
D)$2,500 underapplied

Quizplus · Accepted Answer

The Answer is D

Paul Company Used a Predetermined Overhead Rate During the Year