More Manufacturing Company Uses a Predetermined Overhead Rate Based on Direct

Multiple Choice

More Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, More worked 87,000 actual direct labour hours and incurred $300,000 of actual manufacturing overhead cost. More had initially estimated that it would work 85,000 direct labour hours during the year and incur $340,000 of manufacturing overhead cost. Based on the information provided, More's manufacturing overhead cost for the year was:

A) $8,000 overapplied.
B) $40,000 underapplied.
C) $40,000 overapplied.
D) $48,000 overapplied.
E) $48,000 underapplied.