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13 September, 08:54

The Davis Corporation budgeted factory overhead at $250,000 for the period for the Assembly department, based on a budgeted volume of 100,000 direct labor hours. At the end of the period, the factory overhead control account for the Assembly department had a balance of $252,000. The actual (and allowed) direct labor hours were 104,000. What was the over - or underapplied factory overhead for the period?

A. $8,000 overapplied

B. $10,000 underapplied

C. $10,000 overapplied

D. $8,000 underapplied

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  1. 13 September, 10:01
    0
    B. $10,000 Underapplied

    Explanation:

    Hourly rate = $250,000/100,000 = $2.5 per hour

    Excess hours = 4000

    Excess over head = 4000 * 2.5 = $10,000

    There was a $10,000 underapplied overhead for that period
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