Question
Brainpower Pty Ltd is an advertising agency that uses a job costing system. Brainpower applies overhead to jobs based on direct professional labour hours. At
Brainpower Pty Ltd is an advertising agency that uses a job costing system. Brainpower applies overhead to jobs based on direct professional labour hours. At the beginning of the year, overhead was estimated to be $75000, direct professional labour hours were estimated to be 15000, and direct professional labour cost was projected to be $225000. During the year, Brainpower incurred actual overhead of $80000, actual direct labour hours of 14500 and actual direct labour cost of $222000. What was Brainpower's overapplied or underapplied overhead during the year?
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