Yista Corporation Uses a Predetermined Overhead Rate Based on Direct

question 41

Multiple Choice

Yista Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.The company estimated manufacturing overhead at $510,000 for the year and direct labor-hours at 100,000 hours.Actual manufacturing overhead costs incurred during the year totaled $540,000.Actual direct labor-hours were 105,000.What was the overapplied or underapplied overhead for the year?

• A)$30,000 overapplied
• B)$30,000 underapplied
• C)$4,500 overapplied
• D)$4,500 underapplied

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Definitions:

Prevention Cost

The costs incurred to prevent defects in products or services, including costs related to quality planning, training, and process control.

Vendor Quality

Vendor quality encompasses the ability of a supplier to deliver goods or services that meet the buyer's requirements, including the standards for materials, processes, and final product.

Prevention Cost

Costs incurred to prevent defects in products or services, including training, quality control, and equipment maintenance.

Internal Failure Cost

Costs associated with defects found before a product or service is delivered to the customer, such as scrap and rework expenses.