XYZ Company applies overhead to jobs using direct labor cost as an activity. For

Question

XYZ Company applies overhead to jobs using direct labor cost as an activity. For the month of September, XYZ Company estimated it would use $13,600 of direct labor and incur $17,000 of manufacturing overhead cost. The actual results reported by XYZ Company for September included $18,500 in manufacturing overhead cost and $12,000 of direct labor. For the month of September, overhead was: Question 4 options: A) overapplied by $1,500 B) overapplied by $3,500 C) overapplied by $8,900 D) underapplied by $1,500 E) underapplied by $3,500 F) underapplied by $8,900

Explanation / Answer

D) underapplied by $1,500

direct labor and incur $17,000

Actual

The actual results reported by XYZ Company for September included $18,500 in manufacturing overhead cost

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