Question
Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $204,000 of raw materials on credit; issued materials to production of $201,000
Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $204,000 of raw materials on credit; issued materials to production of $201,000 of which $24,000 were indirect. Minstrel incurred a factory payroll of $156,000, paid in cash, of which $34,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $193,000 during the month, compute the amount of under- or overapplied overhead:
$41,000 overapplied.
$10,000 overapplied.
$10,000 underapplied.
$37,000 overapplied.
$37,000 underapplied.
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