Question
Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For
Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 118,000 and estimated factory overhead was $767,000. The following information was for September. Job X was completed during September, while Job Y was started but not finished.
September 1, inventories:Materials$9,400Work-in-process (All Job X)37,800Finished goods80,800Materials purchases$129,000Direct materials requisitioned:Job X$54,900Job Y40,400Direct labor hours:Job X5,400Job Y4,900Labor costs incurred:Direct labor ($6.40 per hour)$65,920Indirect labor16,600Factory supervisory salaries7,600Rental costs:Factory$8,800Administrative offices2,600Total equipment depreciation costs:Factory$9,400Administrative offices2,300Indirect materials used$14,800
The underapplied or overapplied overhead for September is:
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