Austin Company Uses a Job Order Cost Accounting System

question 15

Multiple Choice

Austin Company uses a job order cost accounting system.The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period.At the end of the period,the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs.Using direct labor hours as the allocation base,calculate the under- or overapplied overhead for the period.

• A) $150,000 overapplied.
• B) $150,000 underapplied.
• C) $300,000 underapplied.
• D) $300,000 overapplied.
• E) $200,000 underapplied.

---

Definitions:

Firm(s)

Business entities involved in commercial, industrial, or professional activities, aiming to generate profits from their operations.

Concentration Ratio

A measurement of the market share of the largest firms within an industry, indicating the level of competition.

Firms

Business entities that engage in commercial, industrial, or professional activities, often distinguished by their legal structure and objectives.

Cutthroat Competitor

A business or firm that aggressively competes in the market, often through pricing strategies, innovation, or marketing, to capture a significant share from rivals.