Pine Publishing Corporation Uses a Predetermined Overhead Rate Based on Direct

question 195

Multiple Choice

Pine Publishing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year the Corporation estimated its total manufacturing overhead cost at $500,000 and its direct labor-hours at 125,000 hours. The actual overhead cost incurred during the year was $450,000 and the actual direct labor-hours incurred on jobs during the year was 115,000 hours. The manufacturing overhead for the year would be:

• A) $10,000 underapplied
• B) $10,000 overapplied
• C) $50,000 underapplied
• D) $50,000 overapplied

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