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Safari File Edit View History Bookmarks Window Help newconnect.mheducation.com ? 2018 Spr -BUS 5 (1298, Gmail Files Solved: Hancock Arrow Video Fu Bard Manufacturing uses... Chapter Nineteen, Job Order Costing Saved Help Save & Exit Submit Hancock Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Hancock estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Hancock incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year points Multiple Choice Print $10,000 overapplied. $17,200 overapplied. $10,000 underapplied. Mc Graw 20

Explanation / Answer

Predetermine overhead rate = 396000*100/220000 = 180% of direct labour cost

Applied overhead = 224000*180% = 403200

Actual overhead = 413200

Under applied overhead = 403200-413200 = 10000

so answer is c) $10000 under applied

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