mark corporation estimates its manufacturing overhead to be $110,000 and its dir

Question

mark corporation estimates its manufacturing overhead to be $110,000 and its direct labor costs to be $220,000 for Year 1. The actual direct labor costs for the year include:

JOB 301 $60,000
JOB 302 $82,000
JOB 303 $98,000

The actual manufacturing overhead was $121,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs by using predetermined rates. What was the over- or underapplied manufacturing overhead for Year 1?

A. $11,000 OVERAPPLIED
B. $11,000 UNDERAPPLIED
C. 1,000 OVERAPPLIED
D. $1,000 UNDERAPPLIED

Explanation / Answer

B. $11,000 UNDERAPPLIED

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