Walter Company Uses a Job-Order Costing System to Account for Product

question 19

Multiple Choice

Walter Company uses a job-order costing system to account for product costs. The following information pertains to 2004: Factory overhead rate is £18 per direct labour hour.
What is the amount of under- or overapplied overhead for Walter Company in 2004?

• A) £40,000 underapplied
• B) £20,000 underapplied
• C) £40,000 overapplied
• D) £20,000 overapplied