Question
Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual
Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual direct labor-hours and incurred $1,000,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 50,000 direct labor-hours during the year and incur $900,000 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was: overapplied by $10,000 underapplied by $90,000 underapplied by $10,000 overapplied by $90,000
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