Biltz Company Uses a Predetermined Overhead Rate Based on Machine

Multiple Choice

Biltz Company uses a predetermined overhead rate based on machine hours to allocate manufacturing overhead to jobs. During the year, the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labor hours were worked. The company estimated that it would incur $525,000 of manufacturing overhead during the year and that 150,000 direct labor hours would be worked. By how much was manufacturing overhead overallocated or underallocated for the year?

A) $57,000 overallocated
B) $57,000 undererallocated
C) $109,500 underallocated
D) $109,500 overallocated