Killian Corporation Began Operations on January 1

Multiple Choice

Killian Corporation began operations on January 1. The predetermined overhead rate was set at $6.00 per direct labor-hour. Debits to Work in Process for the year totaled $550,000. Credits to Work in Process totaled $480,000. Analysis of the Corporation's records indicate that direct labor cost totaled $250,000 for the year, which represents 20,000 direct labor-hours. If the actual manufacturing overhead cost for the year totaled $145,000, then overhead was:

A) overapplied by $25,000
B) overapplied by $10,000
C) underapplied by $25,000
D) underapplied by $10,000