Baker Corporation Applies Manufacturing Overhead on the Basis of Direct

Multiple Choice

Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $210,600 and 6,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $209,000 and actual direct labor-hours were 5,980. The overhead for the year was:

A) $702 underapplied
B) $898 underapplied
C) $702 overapplied
D) $898 overapplied