Baka Corporation Applies Manufacturing Overhead on the Basis of Direct

question 40

Multiple Choice

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600.The overhead for the year was:

• A) $5,100 underapplied
• B) $7,400 underapplied
• C) $5,100 overapplied
• D) $7,400 overapplied

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