Question
XYZ Company applies overhead to jobs using direct labor cost as an activity. For the current year, XYZ's estimated overhead was $500,000 while the actual
XYZ Company applies overhead to jobs usingdirect labor costas an activity. For the
current year, XYZ's estimated overhead was $500,000 while the actual overhead cost
totaled $510,000. XYZ's estimated direct labor cost was $250,000 and the actual direct
labor cost amounted to $265,000. For the current year,overhead was:
1.under-applied by $10,000
2.under-applied by $15,000
3.under-applied by $20,000
4.under-applied by $25,000
5.over-applied by $10,000
6.over-applied by $15,000
7.over-applied by $20,000
8.over-applied by $25,000
9.none of the above are correct
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