Tulip Uses a Job Costing System That Allocates Overhead as a Percentage

question 32

Multiple Choice

Tulip uses a job costing system that allocates overhead as a percentage of direct labour costs. The budget for this year was; direct materials $60,000, direct labour $30,000, overhead $45,000. The actual costs for this year were; direct materials $50,000, direct labour $35,000, overhead $45,000. How much overhead was over/under allocated?

• A) $0
• B) $150 overallocated
• C) $21,550 underallocated
• D) $7,500 overallocated

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Definitions:

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