Malcom Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.
On September 1, the estimate for the month were:
Manufacturing overhead……………… $17,000
Direct Labor-hours……………………. $13,600
During September, the actual results were:
Manufacturing overhead……………… $18,500
Direct Labor-hours……………………. 12,000
The cost records for September will show:
A) Overapplied overhead of $1,500- This answer is incorrect
B) Underapplied overhead of $1,500
C) Overapplied overhead of $3,500
D) Underapplied overhead of $3,500