Minstrel Manufacturing Uses a Job Order Costing System

Multiple Choice

Minstrel Manufacturing uses a job order costing system.During one month Minstrel purchased $198,000 of raw materials on credit;issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,paid in cash,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead application rate of 150% of direct labor cost.If Minstrel incurred total overhead costs of $167,800 during the month,compute the amount of under- or overapplied overhead:

A) $2,800 overapplied.
B) $17,800 underapplied.
C) $2,800 underapplied.
D) $17,800 overapplied.
E) $57,200 overapplieD.$167,800 - ($110,000 * 1.5) = $2,800