Mango Company Applies Overhead Based on Direct Labor Costs

question 134

Multiple Choice

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $300,000, and direct labor costs to be $150,000. Actual overhead costs for the year totaled $330,000, and actual direct labor costs totaled $170,000.
-At year-end, Factory Overhead account is:

• A) Overapplied by $20,000.
• B) Neither overapplied nor underapplied.
• C) Overapplied by $170,000.
• D) Overapplied by $10,000.
• E) Underapplied by $10,000.

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