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Micro Enterprises planned to produce 120,000 lerts per year. Annual overhead, of which 32.5% is variable, is estimated at $360,000. Each lert takes 1.2 machine
Micro Enterprises planned to produce 120,000 lerts per year. Annual overhead, of which 32.5% is variable, is estimated at $360,000. Each lert takes 1.2 machine hours and 3 labor hours to produce. The firm allocates overhead by direct labor hours.
In March, when 11,000 lerts were produced and expenditures on overhead amounted to $36,000. Which is true for this month?
A. Over-applied overhead is $1,000
B. Under-applied overhead is $3,00
C. Over-applied overhead is $3,000
D. None of the choices are correct
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