Use the Information Below to Answer the Following Question(s)

question 222

Multiple Choice

Use the information below to answer the following question(s) .
Waterside Sports Equipment Company's work in process inventory on June 1 has a balance of $21,500 representing Job No. 151. During June, $52,000 of direct materials were requisitioned for Job No. 151 and $31,000 of direct labour cost was incurred on Job No. 151. Manufacturing overhead is allocated at 120% of direct labour cost. Actual manufacturing overhead costs incurred in June amounted to $42,000. No new jobs were started during June. Job No. 151 is completed on June 28.
-Is manufacturing overhead overallocated or underallocated for the month of June at Waterside Sports Equipment Company? By how much?

• A) $16,167 overallocated
• B) $4,800 overallocated
• C) $4,800 underallocated
• D) $16,167 underallocated

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Definitions:

Retail Value

The total price at which a product or service is sold to consumers in the retail market, typically including the costs of production, distribution, and a markup for profit.

Verified

Confirmed as true, accurate, or to meet a particular standard.

Predatory Pricing

The strategy of setting prices at a very low level with the intent to eliminate competition, considered illegal in many jurisdictions.