The Prospect Company estimates that its overhead costs will amount to $602,000 and the company's...
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Accounting
The Prospect Company estimates that its overhead costs will amount to $602,000 and the company's manufacturing employees will work 86,000 direct labor hours during the current year. Overhead costs are allocated based on direct labor hours. If actual overhead costs for the year amounted to $619,000 and actual labor hours amounted to 87,000, then overhead cost would be:
A- underapplied by $10,000.
B- overapplied by $4,000.
C- underapplied by $17,000.
D- overapplied by $10,000.
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