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

question 148

Multiple Choice

The following information was gathered for Gophers Company: $$\begin{array} { l r } \text { Budgeted direct-labor hours } & 31,000 \\\text { Actual direct-labor hours } & 32,400 \\\text { Budgeted factory overhead } & \$ 147,250 \\\text { Actual factory overhead } & \$ 149,980\end{array}$$ Assume the cost driver is direct-labor hours.The amount of over/underapplied overhead is_____.

• A)$2,730 underapplied
• B)$2,730 overapplied
• C)$6,450 underapplied
• D)$3,920 overapplied

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Definitions:

Delivery Cycle Time

The total time taken from receiving a customer order to the delivery of the product, measuring the efficiency of order fulfillment.

Fill Orders

The process by which companies prepare and deliver products or services as requested by customers in purchase orders.

External Failure Cost

Costs incurred when products fail to meet quality standards after being delivered to the customer, including returns, repairs, and warranties.

Quality Cost Report

A document or set of data analyzing the costs associated with ensuring the quality of products or services, including prevention, appraisal, and failure costs.