Question: Crazy Cat Lady Company uses a predetermined overhead rate based on direct labor hours (DLHs) to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $200,000 and DLHs would be 20,000. The actual figures for the year were $215,000 for manufacturing overhead and 21,000 DLHs. The cost records for the year will show:
overapplied overhead of $5,000.
overapplied overhead of $10,000.
underapplied overhead of $5,000.
underapplied overhead of $10,000.