Carlo Company Uses a Predetermined Overhead Rate Based on Direct

Multiple Choice

Carlo Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.The company estimated manufacturing overhead at $255,000 for the year and direct labour-hours at 100,000 hours.Actual manufacturing overhead costs incurred during the year totalled $270,000.Actual direct labour hours were 105,000.What was the overapplied or underapplied overhead for the year?

A) $2,250 overapplied.
B) $2,250 underapplied.
C) $15,000 overapplied.
D) $15,000 underapplied.