Ansley Products Applies Overhead Using a Predetermined Overhead Rate

question 95

Multiple Choice

Ansley Products applies overhead using a predetermined overhead rate.Overhead is applied based on direct labor hours.At the beginning of the year, it is estimated that $500,000 in overhead will be incurred and 25,000 hours will be worked.At year-end, the company had used 24,000 hours of labor, and actual overhead costs were $470,000.What can be concluded from this?

• A)Cost control was good.
• B)Overhead is overapplied by $10,000.
• C)Overhead is underapplied by $10,000.
• D)Overhead is applied at a rate of $19.58 per hour

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