Answer:
B) $160,000 overallocated
Explanation:
we calcualte the predetermined manufacturing overhead rate by distribution the expected overhead cost over the cost Driver.
<em>"Hilltop Manufacturing uses a predetermined manufacturing overhead rate based on direct labor hours"</em>
In this case, it is the labor hours
550,000 / 50,000 = 11
Then we multiply this rate by the actual output of the driver:
11 x actual direct labor
11 x 60,000 = 660,000
New, we calcualte the application of overhead
660,000 - 500,000 = 160,000
It was overapplied by 160,000 as the actual cost were lower than expected.