Question
Elevate, Inc. is a manufacturer of bed frames. The company allocates manufacturing overhead to production using a single, plantwide overhead rate based on the
Elevate, Inc. is a manufacturer of bed frames. The company allocates manufacturing overhead to production using a single, plantwide overhead rate based on the most appropriate cost driver for its labor intensive manufacturing environment. The following information is available for the year just ended: Estimated Manufacturing Overhead Estimated Direct Labor Hours Estimated Machine Hours Actual Direct Labor Hours Actual Machine Hours Actual Manufacturing Overhead $350,000 50,000 10,000 55,000 12,000 $362,000 What is the amount by which manufacturing overhead was either underallocated or overallocated for the year? OA. Underallocated by $278,000 B. Overallocated by $58,000 OC. Ovallocated by $35,000 D. Overallocated by $23,000 O E. Underallocated by $12,000
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