Creative Lighting Inc. makes specialty table lamps. Manufacturing overhead is applied to production on a direct labor hours basis. During June, the first month of the companys fiscal year, $57,150 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of $5.85 per direct labor hour.

b. Actual manufacturing overhead costs incurred during June totaled $47,670. Calculate the amount of over- or underapplied overhead for June.

actual overhead incurred ....................

overhead applied .................................

overapplied overhead ..................

c. Identify two possible explanations for the over- or underapplied overhead. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

check all that apply

• Actual costs were less than anticipated.
• More hours were worked.
• Additional variable costs.
• Additional fixed costs.
• Allocated costs less than anticipated.