Beta Company Uses a Predetermined Overhead Rate Based on Direct

question 66

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 $600,400 of manufacturing overhead during the year and that 150,100 direct labor hours would be worked. During the year, the company actually incurred manufacturing overhead costs of $582,200 and 135,400 direct labor hours were worked. By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

• A)$18,200 underallocated
• B)$40,600 overallocated
• C)$40,600 underallocated
• D)$18,200 overallocated

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Definitions:

Statutory

Related to, or created by, statutes, which are laws enacted by a legislative body.

Mechanic's Lien

A legal claim against a property for unpaid work or supplies, giving workers and suppliers a form of security for their investment.

Homeowner

An individual who owns and resides in a house or property.

Contractor

An individual or company that enters into a contract to perform services or provide goods for another party in exchange for compensation.