Carlo Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing...

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Accounting

Carlo Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at $215,000 for the year and direct labour hours at 80,000 hours. Actual manufacturing overhead costs incurred during the year totalled $295,000; actual direct labour hours were 120,000. What was the overapplied or underapplied overhead for the year?
a. $27,500 underapplied
b. $27,500 overapplied
c. $80,000 underapplied
d. $80,000 overapplied
Clear my choice
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