Question
Osborn Manufacturing uses a predetermined overhead rate of $17.20 per direct labour-hour. This predetermined rate was based on 12,500 estimated direct labour-hours and $238,400 of
Osborn Manufacturing uses a predetermined overhead rate of $17.20 per direct labour-hour. This predetermined rate was based on 12,500 estimated direct labour-hours and $238,400 of estimated total manufacturing overhead. The company incurred actual total manufacturing overhead costs of $245,000 and 13,500 total direct labour-hours during the period. What was the amount of underapplied or overapplied manufacturing overhead for the period? A) Manufacturing overhead was overapplied by $6,600. B) Manufacturing overhead was overapplied by $12,800. C) Manufacturing overhead was underapplied by $12,800. D) Manufacturing overhead was underapplied by $6,600. E) Manufacturing overhead was overapplied by $6,200. Enter only the letter of the correct response in the space below (i.e. A, B, C, D, or E).
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