Carlo Company Uses a Predetermined Overhead Rate Based on Direct

question 27

Multiple Choice

Carlo Company uses a predetermined overhead rate based on direct labour hours to appl? manufacturing overhead to jobs. The company estimated manufacturing overhead at
$255,000 for the year and direct labour-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totalled $270,000. Actual direct labour hours were 105,000. What was the overapplied or underapplied overhead for the year?

• A)$2,250 underapplied.
• B)$15,000 underapplied.
• C)$2,250 overapplied.
• D)$15,000 overapplied.

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Definitions:

Cross-Docking

A logistics procedure where products received at a warehouse are directly transferred from incoming to outgoing shipping with minimal or no storage time.

Documentation

The process or practice of recording information to detail activities, procedures, or conditions.

Order Replenishment Systems

Automated processes or systems used to manage inventory levels and reorder products or materials as needed.

Inventory Management Systems

Technologies and strategies used to monitor and manage the stock of goods in a business to optimize inventory levels and reduce costs.