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Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing was
Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing was $1,200,000 and its estimated labor cost was $600,000. Actual manufacturing overhead amounted to $1,240,000, with actual direct labor cost of $650,000.
For the year, manufacturing overhead was
A) over-applied by $60,000
B)under-applied by $60,000
C) over-applied by $40,000
D) under-applied by $44,000 (Could you explain how did you come up with the answer?)
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