Question

Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred $84,000 Actual direct labor-hours worked 27,000 The overapplied or underapplied manufacturing overhead for the year was:

Answer 1

$12,000 Overhead Underapplied

Step-by-step explanation:

Calculation to determine what The overapplied or underapplied manufacturing overhead for the year was:

Total pre-determined manufacturing overhead $72,000

($3*24,000)

Less Actual manufacturing overhead cost incurred ($84,000)

Overhead Underapplied $12,000

Therefore The overapplied or underapplied manufacturing overhead for the year was:$12,000 Overhead Underapplied