The Following Information Was Gathered for Marlins Company Assume the Cost Driver Is Direct-Labor Hours

question 146

Multiple Choice

The following information was gathered for Marlins Company: $$\begin{array} { l r } \text { Budgeted direct-labor hours } & 8,000 \\\text { Actual direct-labor hours } & 8,100 \\\text { Budgeted factory overhead } & \$ 224,000 \\\text { Actual factory overhead } & \$ 224,970\end{array}$$ Assume the cost driver is direct-labor hours.The amount of over/underapplied overhead is_____.

• A)$970 underapplied
• B)$970 overapplied
• C)$1,830 underapplied
• D)$1,830 overapplied

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Definitions:

Prepaid Insurance

An asset account that represents insurance payments made in advance for coverage that extends over a future period.

Depreciation Expense

The orderly apportioning of the expense of a concrete asset over its expected lifetime, illustrating its decline in value as time progresses.

Factual Measurement

A term referring to the quantification of data that is based on facts and objectivity, often used in the context of scientific or financial analysis.

Accrued Salaries

Salaries that have been earned by employees but have not yet been paid by the company.