Snappy Company Has a Job-Order Cost System and Uses a Predetermined

Multiple Choice

Snappy Company has a job-order cost system and uses a predetermined overhead rate based on direct Labour-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct Labour-hours were estimated at £100,000 and 40,000 hours, respectively, for the year. In July, Job #334 was completed at a cost of £5,000 in direct materials and £2,400 in direct Labour. The Labour rate is £6 per hour. By the end of the year, Snappy had worked a total of 45,000 direct Labour-hours and had incurred £110,250 actual manufacturing overhead cost.
-Snappy's manufacturing overhead for the year was:

A) £10,250 underapplied.
B) £12,500 overapplied.
C) £12,500 underapplied.
D) £2,250 overapplieD.