ABC Company Listed the Following Data for the Current Year

question 12

Multiple Choice

ABC Company listed the following data for the current year: $\begin{array}{lr}\text { Budgeted factory overhead } & \$ 1,044,000 \\\text { Budgeted direct labor hours } & 69,600 \\\text { Budgeted machine hours } & 24,000 \\\text { Actual factory overhead } & 1,037,400 \\\text { Actual labor hours } & 72,600 \\\text { Actual machine hours } & 23,600\end{array}$ If overhead is applied based on machine hours, the overapplied/underapplied overhead is:

• A)$15,300 underapplied.
• B)$15,300 overapplied.
• C)$10,800 underapplied.
• D)$10,800 overapplied.
• E)$-0-.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process, often used to allocate labor costs to products.

Multiple Production

A manufacturing strategy involving the concurrent production of several items or product lines in a single facility.

Direct Labor Hours

The total hours worked directly on producing goods, an important factor in costing and efficiency analyses.

Factory Overhead

All indirect costs associated with manufacturing a product, including utilities, maintenance, and salaries of non-direct labor.