Beta Company Uses a Predetermined Overhead Rate Based on Direct

question 145

Multiple Choice

Beta Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs.The company estimated that it would incur $600,000 of manufacturing overhead during the year and that 150,000 direct labor hours would be worked.During the year,the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labor hours were worked.
By how much was manufacturing overhead overallocated or underallocated for the year?

• A)$18,000 underallocated
• B)$42,000 overallocated
• C)$42,000 underallocated
• D)$18,000 overallocated

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