Precision Corporation Used a Predetermined Overhead Rate Last Year of $3

question 71

Multiple Choice

Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: The overapplied or underapplied manufacturing overhead for the year was:

• A) $3,000 underapplied
• B) $3,000 overapplied
• C) $12,000 underapplied
• D) $12,000 overapplied

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