Lopar Company Uses a Predetermined Overhead Rate Based on Direct

question 89

Multiple Choice

Lopar Company uses a predetermined overhead rate based on direct labor dollars. Lopar Company estimated that its 2010 overhead would total $938,000 and that 2010 direct labor costs would be $670,000. During 2010, actual overhead costs were $960,000, and actual direct labor costs were $700,000. By how much was Lopar's overhead over- or underapplied?

• A) $20,000 overapplied
• B) $20,000 underapplied
• C) $18,000 overapplied
• D) $10,000 underapplied

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