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JKL Company allocates manufacturing overhead costs using a predetermined overhead rate (calculated at the beginning of the period) and direct labor hours as a cost
JKL Company allocates manufacturing overhead costs using a predetermined overhead rate (calculated at the beginning of the period) and direct labor hours as a cost allocation base. The budgeted direct labor hours is 600,000 hours and the budgeted manufacturing overhead is $720,000. The actual labor hours for the period turns out to be 550,000 hours and the actual manufacturing overhead amounts to $680,000. The manufacturing overhead for JKL Company for the year is: Select one: a. Over-allocated by $40,000 O b. Over-allocated by $20,000 c. Under-allocated by $40,000 d. Under-allocated by $20,000 O
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