During the Year Just Completed,Paul Company Used a Predetermined Overhead $\quad$

During the year just completed,Paul Company used a predetermined overhead rate of $3.50 per direct labour hour,based on an estimate of 22,000 direct labour hours to be worked during the year.Actual overhead cost and activity during the year were:
Actual manufacturing overhead cost incurred $\quad$ $\quad$ $\quad$ $ 90,000
Actual direct labour hours worked $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 25,000
What was the under- or overapplied overhead for the year?

A) $2,500 over applied.
B) $2,500 under applied.
C) $10,500 over applied.
D) $13,000 under applied.

Correct Answer:

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