Question
Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the
Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $200,100 and direct labour hours would be 16,000. The actual figures for the year were $196,000 for manufacturing overhead and 20,000 direct labour hours. The cost records for the year will show which of the following?
Select one: a. Underapplied overhead of $30,000 b. Overapplied overhead of $6,000 c. Underapplied overhead of $54,200 d. Overapplied overhead of $54,200
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