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Freeman Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct labor hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labor hours. The cost records for the year will show:

a. overapplied overhead of $30,000.

b. underapplied overhead of $30,000.

c. underapplied overhead of $6,000.

d. overapplied overhead of $6,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M996518

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