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

Multiple Choice

Snappy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor 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 labor. The labor rate is $6 per hour. By the end of the year, Snappy had worked a total of 45,000 direct labor-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