A Manufacturing Company Applies Overhead Based on Direct Labor Hours

question 58

Multiple Choice

A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $754,400, and actual direct labor hours were 92,000. What is the amount of overapplied or underapplied overhead at the end of the year?

• A) $34,400 overapplied
• B) $18,400 overapplied
• C) $34,400 underapplied
• D) $18,400 underapplied

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Definitions:

Socially Responsible

Refers to ethical practices and policies that aim to positively impact society, the environment, and communities while conducting business.

Corporate Social Responsibility

A company's commitment to manage its social, environmental, and economic effects responsibly and in line with public expectations.

Retention Rates

The percentage of customers or users who continue to use a service or product over a specific period, indicating loyalty or satisfaction.

Manufacturing Expenses

Manufacturing Expenses are costs directly related to the production of goods, including raw materials, labor, and overhead expenses involved in the manufacturing process.