Crich Corporation Uses Direct Labor-Hours in Its Predetermined Overhead Rate

question 136

Multiple Choice

Crich Corporation uses direct labor-hours in its predetermined overhead rate.At the beginning of the year,the estimated direct labor-hours were 21,800 hours and the total estimated manufacturing overhead was $497,040.At the end of the year,actual direct labor-hours for the year were 21,500 hours and the actual manufacturing overhead for the year was $492,040.Overhead at the end of the year was:

• A) $6,840 overapplied
• B) $6,840 underapplied
• C) $1,840 underapplied
• D) $1,840 overapplied

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Definitions:

Total Cost

The complete cost of producing and delivering a product or service, including material, labor, overhead, and any other direct or indirect costs.

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