Maurice Company allocates overhead using direct labour-hours. For 2021, the estimated and actual labour-hours were 216,000 and 185,000 respectively, and the predetermined overhead rate used to apply overhead for the year was $26.10 per direct labour-hour. The manufacturing overhead control T-account showed a credit balance of $202,450 at the end of the year, and this balance was disposed of at the end of the year by closing it to cost of goods sold.

Required:

1.Was manufacturing overhead under- or overapplied?

multiple choice 1

• Underapplied
• Overapplied

2.Compute the actual overhead amount incurred over the year.

3.How will end-of-period disposal of this amount impact net income?

multiple choice 2

• Increase
• Decrease