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Lonestar Corporation uses a job-order costing system to account for product costs. The following information pertains to 2018: Materials Placed into Production $140,000 Indirect Labor
Lonestar Corporation uses a job-order costing system to account for product costs. The following information pertains to 2018:
| Materials Placed into Production | $140,000 |
| Indirect Labor | 40,000 |
| Direct Labor (10,000 hours) | 160,000 |
| Depreciation of Factory Building | 60,000 |
| Other Factory Overhead | 100,000 |
| Increase in Work-in-Process Inventory | 30,000 |
Factory overhead rate is $18 per direct labor hour. What is the amount of under- or overapplied overhead for Lonestar Corporation in 2018?
| a. | $20,000 underapplied | |
| b. | $40,000 overapplied | |
| c. | $20,000 overapplied | |
| d. | $40,000 underapplied |
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