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Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $368,900;
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $368,900; materials of $407,000 and direct labor of $217,000. During the year Adams incurred $391,500 in materials costs, $387,000 in overhead costs and $221,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year. $11,300 overapplied. $18,100 underapplied. $11,300 underapplied. $4,500 underapplied. $18,100 overapplied.
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