Collins Company Uses a Job Costing System and Allocates Overhead

question 52

Multiple Choice

Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: $\begin{array}{lrr}&\text { Estimated }&\text { Actual }\\\text { Manufacturing overhead } & \$ 166,500 & \$ 165,000 \\\text { Direct labour hours } & 50,000 & 60,000\end{array}$ The amount of over- or underapplied overhead for 2017 was:

• A) $1,500 underapplied
• B) $3,000 underapplied
• C) $1,500 overapplied
• D) $34,800 overapplied

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Definitions:

Real GDP

Inflation-adjusted Gross Domestic Product, offering a clearer view of an economy's actual size and its growth trajectory over periods.

Growth Rate

A measure of the increase in size, number, value, or strength of a variable over a specific period of time.

Productivity

The measure of how efficiently goods and services are produced, often evaluated as the output per unit of input, such as labor or capital.

Living Standards

The amount of prosperity, comfortability, tangible assets, and essentials afforded to a distinct socioeconomic bracket or area.