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, $57,090 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of $5.85 per direct labor hour.

- 9759 hours of direct labor used during June

- Actual overhead incurred: 52,630

- Overhead applied: 57,090

- Overapplied overhead: (4460)

Identify two possible explanations for the over- or underapplied overhead. (Select all that apply.)

- Actual costs were less than anticipated.

- More hours were worked.

- Additional variable costs.

- Additional fixed costs.

- Allocated costs less than anticipated.

The overapplied or underapplied overhead for the year is normally transferred to cost of goods sold in the income statement. True or False