Master House Ltd Uses a Job Costing System That Allocates

Master House Ltd uses a job costing system that allocates overhead as a percentage of direct labour costs. The budget for this year was; direct materials $60,000, direct labour $30,000, overhead $60,000. The actual costs for this year were; direct materials $50,000, direct labour $35,000, overhead $55,000. How much overhead was over/under allocated?

A) $0
B) $15,000 over allocated
C) $5,000 over allocated
D) cannot be determined

Correct Answer:

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