The Following Information Is Available from the Terry Company The Total Under or Overapplied Overhead for Terry Company for

question 34

Multiple Choice

The following information is available from the Terry Company: $\begin{array}{lrr}\text { Actual total factory overhead cost incurred } & \$ 25,000 \\\text { Actual fixed overhead cost incurred } & \$ 10,400 \\\text { Budgeted fixed overhead expenses } & \$ 11,000 \\\text { Actual direct labor hours (DLH) worked } & 4,400 \\\text { Standard DLHs for this period's production (output) } & 4,000 \\\text { Standard variable overhead rate per DLH } & \$ 3.00 \\\text { Standard fixed overhead rate per DLH } & \$ 2.50\end{array}$ The total under or overapplied overhead for Terry Company for the period, to the nearest dollar, is:

• A) $800 overapplied.
• B) $800 underapplied.
• C) $2,600 underapplied.
• D) $3,000 overapplied.
• E) $3,000 underapplied.

---

Definitions:

Net Present Value

The variance between cash inflows' and outflows' current values during a certain period.

Discount Factor(s)

A numerical factor used to calculate the present value of future cash flows, reflecting the time value of money.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal installments, reflecting the asset’s gradual decrease in value.

Payback Period

The length of time it takes for an investment to recover its initial outlay in terms of profits or savings.