Malcolm Company Uses a Predetermined Overhead Rate Based on Direct $\begin{array}{lrr} \text { Manufacturing overhead. } &£ 17,000\\ \text {Direct Labour hours. } &13,600\\\end{array}$

Multiple Choice

Malcolm Company uses a predetermined overhead rate based on direct Labour hours to apply manufacturing overhead to jobs
The cost records for September will show:
On September 1, the estimates for the month were:
$\begin{array}{lrr} \text { Manufacturing overhead. } &£ 17,000\\ \text {Direct Labour hours. } &13,600\\\end{array}$

During September, the actual results were:
$\begin{array}{lrr} \text { Manufacturing overhead} &£ 18,500\\ \text { Direct Labour hours.} &12,000\\\end{array}$

A) Overapplied overhead of £1,500.
B) Underapplied overhead of £1,500.
C) Overapplied overhead of £3,500.
D) Underapplied overhead of £3,500.