Precision Company Data Precision Company Used a Predetermined Overhead Rate Last Year of overhead

question 64

Multiple Choice

Precision Company data: $\begin{array}{lrr} \text { Actual manufacturing overhead cost incurred} &£ 84,000\\ \text {Actual direct Labour hours worked } &27,000\\\end{array}$

Precision Company used a predetermined overhead rate last year of £3 per direct Labour hour, based on an estimate of 24,000 direct Labour hours to be worked during the year.
The under- or overapplied overhead for the year was:

• A)£3,000 underapplied.
• B)£3,000 overapplied.
• C)£12,000 underapplied.
• D)£12,000 overapplieD.

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