Magenta Ltd Uses a Job Order Costing System and Applies

Short Answer

Magenta Ltd uses a job order costing system and applies factory overhead,based on direct labour hours,at a rate of $2 per direct labour hour.The data relating to production for last period is: $\begin{array}{lr}\text { Direct materials } & \$ 13000 \\\text { Indirect materials } & 2300 \\\text { Direct labour (18000 hours) } & 54000 \\\text { Production supervisor salaries } & 13700 \\\text { Maintenance costs } & 7000 \\\text { Factory rent } & 8100 \\\text { Factory utilities } & 1800 \\\text { Depreciation on machinery } & 2200\end{array}$

The overhead under or over-applied after ov erhead has been charged to production is:
a. $\$ 900$ over-applied
b. $\$ 900$ under-applied
c. $\$ 2700$ over-applied
d. $\$ 2700$ under-applied