Question

Brusveen Corporation applies manufacturing overhead to jobs on the basis of direct labor-hours. The following information relates to Brusveen for last year: Estimated Actual Direct labor-hours 15,000 14,800 Manufacturing overhead cost $300,000 $287,120 What was Brusveen's underapplied or overapplied overhead for last year? $4,000 underapplied $8,880 underapplied $8,880 overapplied $9,000 underapplied

Answer 1

Answer:

The correct answer is C: $8,880 overapplied

Explanation:

Giving the following information:

Applies manufacturing overhead to jobs based on direct labor-hours.

The following information relates to Brusveen for last year: Estimated Direct labor-hours= 15,000

Actual  direct labor-hours= 14,800

Estimated Manufacturing overhead cost= $300,000

Actual Manufacturing overhead cost= $287,120

Overhead rate= 300000/15000= $20hour

Allocated overhead= $20*14800= $296,000

Overhead variance= real overhead - allocated overhead= 287120 - 296000= 8880 favorable (overapplied)