Carlo Company uses a predetermined overhead rate based on direct labor hours to

Question

Carlo Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhad to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labor hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totaled $265,500. Actual direct labor hours were 105,000. What was the overapplied or underapplied overhead for the year? (Points : 5) $2,250 overapplied $2,250 underapplied $15,000 overapplied $15,000 underapplied

Explanation / Answer

Hi, Please find the answer as follows: Manufacturing Overhead Incurred = 265500 Manufacturing Overhead Applied = 255000/100000*105000 = 267750 Option A (2,250 overapplied) is correct. Thanks.

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