Freeman Company Uses a Predetermined Overhead Rate Based on Direct

Multiple Choice

Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.At the beginning of the year,the company estimated manufacturing overhead would be $150,000 and direct labour hours would be 10,000.The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labour hours.The cost records for the year will show which of the following?

A) Overapplied overhead of $30,000.
B) Underapplied overhead of $30,000.
C) Underapplied overhead of $6,000.
D) Overapplied overhead of $6,000.