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 30,000 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 30,000 actual direct labor-hours and incurred $580,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 29,000 direct labor-hours during the year and incur $551,000 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was:
overapplied by $19,000
underapplied by $10,000
underapplied by $19,000
overapplied by $10,000
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