Question
Franklin Inc. manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect cost rate of $18 per direct labor-hour. The following data
Franklin Inc. manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2018:
Direct Materials$170,000
Direct labor (4,600 hours @ $10/hour)46,000
Indirect Labor17,000
Plant facility rent34,000
Depreciation on plant machinery and equipment24,500
Sales commissions33,000
Administrative expenses28,000
For June 2018, the manufacturing overhead is ______________.
A. overapplied by $20,700
B. underapplied by $7,300
C. underapplied by $20,700
D. overapplied by $7,300
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