Wert Corporation Uses a Predetermined Overhead Rate Based on Direct

Multiple Choice

Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs.Last year,the company's estimated manufacturing overhead was $1,200,000 and its estimated level of activity was 50,000 direct labor-hours.The company's direct labor wage rate is $12 per hour.Actual manufacturing overhead amounted to $1,240,000,with actual direct labor cost of $650,000.For the year,manufacturing overhead was:

A) overapplied by $60,000
B) underapplied by $60,000
C) overapplied by $40,000
D) underapplied by $44,000