Beaver Company Used a Predetermined Overhead Rate Last Year of $2

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were:
Actual manufacturing overhead cost incurred $\quad$ $\quad$ $\quad$ $ 47,000
Actual direct labour hours worked $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 24,000
What was the under- or overapplied overhead last year?

A) $1,000 under applied.
B) $1,000 over applied.
C) $2,000 under applied.
D) $3,000 over applied.

Correct Answer:

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