Beaver Company Used a Predetermined Overhead Rate Last Year of $2

question 50

Multiple Choice

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were:
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Actual manufacturing overhead cost } \\\text { incurred }\end{array} & \$ 47,000 \\\hline \text { Actual direct labour hours worked } & 24,000 \\\hline\end{array}$
What was the under- or overapplied overhead last year?

• A) $1,000 underapplied.
• B) $1,000 overapplied.
• C) $2,000 underapplied.
• D) $3,000 overapplied.

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