Question

A manufacturing company applies factory overhead based on direct labor hours. at the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 45,000. actual factory overhead costs incurred were $377,200, and actual direct labor hours were 47,000. what is the amount of overapplied or underapplied manufacturing overhead at the end of the year?

Answer 1

Answer:

The amount of underapplied manufacturing overhead at the end of the year is $1200.

Explanation:

Total estimated $360,000/est

direct labour hours 45000 = $8x (Actual Dl hours) 47000

                                             = $376,000

Actual Overhead worked = $377,200 - $376,000

                                           = $1200 underapplied

Therefore, The amount of underapplied manufacturing overhead at the end of the year is $1200.