The Hampshire Company Produces 9 Volt Batteries and AAA Batteries

The Hampshire Company produces 9 volt batteries and AAA batteries. The Hampshire Company uses a plant-wide rate to apply overhead based on direct labour hours. The following data is given:
$\begin{array}{|c|c|}\hline \text { Actual overhead } & \$ 325,000 \\\hline \text { Estimated overhead } & \$ 350,000 \\\hline \text { Estimated activity: } & \\\hline \text { 9 volt battery } & 100,000 \quad \text { direct labour hours } \\\hline \text { AAA battery } & 400,000 \text { direct labour hours } \\\hline \text { Actual activity: } & \\\hline 9 \text { volt battery } & 125,000 \quad \text { direct labour hours } \\\hline \text { AAA battery } & 400,000 \quad \text { direct labour hours } \\\hline \text { Units produced: } & \\\hline 9 \text { volt battery } & 500,000 \\\hline \text { AAA battery } & 250,000 \\\hline\end{array}$
-Refer to the figure.How much was overhead overapplied or underapplied?

A) $17,500
B) $25,000
C) $42,500
D) $50,000

Correct Answer:

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