Carlo Company Uses a Predetermined Overhead Rate Based on Direct

question 3

Multiple Choice

Carlo Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.The company estimated manufacturing overhead at $255,000 for the year and direct labour hours at 100,000 hours.Actual manufacturing overhead costs incurred during the year totalled $270,000;actual direct labour hours were 105,000.What was the overapplied or underapplied overhead for the year?

• A) $2,250 overapplied.
• B) $2,250 underapplied.
• C) $15,000 overapplied.
• D) $15,000 underapplieD.
• OH rate = $255,000/100,000 hrs.= $2.55/hr.Actual overhead = $270,000 therefore Underapplied $2,250

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Definitions:

Alpha Waves

Brain waves detected by electroencephalography (EEG) that are typically associated with a state of relaxed, awake alertness.

Beta Waves

Brainwave patterns associated with active, alert consciousness and cognitive processes.

Delta Waves

Slow brain waves that indicate deep sleep or unconsciousness.

Spatial Perception

The ability to recognize and organize objects and their spatial relation in an environment.