Fresco Production Uses a Predetermined Overhead Rate Based Upon Direct

question 14

Multiple Choice

Fresco Production uses a predetermined overhead rate based upon direct labour hours. The firm has the following budgeted and actual data for the current year:
$$\begin{array} { l r } \text { Budgeted factory overhead cost } & \$ 12000 \\\text { Actual factory overhead cost } & \$ 13500 \\\text { Budgeted direct labour hours } & 2000 \\\text { Actual direct labour hours } & 2400\end{array}$$
What was the amount of underapplied or overapplied overhead for the year?

• A) $1 500 overapplied
• B) $1 500 underapplied
• C) $900 underapplied
• D) $900 overapplied

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