Question
JD Corporation uses a job-order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor dollars. The rate
JD Corporation uses a job-order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor dollars. The rate for the current year is 200 percent of direct labor dollars. This rate was calculated last November and will be used throughout the current year. During September, direct labor added co jobs was as follows:
| Job #1 | Job #2 | Job#3 |
Direct labor | $1,000 | $4,500 | $2,000 |
Actual manufacturing overhead for the month of September was
$17,500. For September, manufacturing overhead was
A. overapplied by $2,500
B. underapplied by $2,500
C. correctly applied
D. underapplied by $1,000
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please explain your answer election
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