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Nexus Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing overhead

Nexus Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing overhead was $2,313,400 and its estimated level of activity was 53,800 direct labor-hours. The company's direct labor wage rate is $12 per hour. Actual manufacturing overhead amounted to $4,221,000, with actual direct labor cost of $1,200,000. For the year, manufacturing overhead was:

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  • underapplied by $79,000.
  • underapplied by $57,300.
  • overapplied by $53,300.
  • overapplied by $79,000.

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