Yole Corporation Uses a Predetermined Overhead Rate Based on Direct

Multiple Choice

Yole Corporation uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, Yole estimated manufacturing overhead would be $100,000 and direct labour hours would be 50,000. The actual figures for the year were $120,000 for manufacturing overhead and 52,000 direct labour hours. The cost records for the year will show which of the following?

A) $2,000 for overhead underapplied.
B) $16,000 for overhead overapplied.
C) $16,000 for overhead underapplied.
D) $20,000 for overhead underapplied.
E) $20,000 for overhead overapplied.