Freeman Company Uses a Predetermined Overhead Rate Based on Direct

Multiple Choice

Freeman Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct labor-hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labor-hours. The cost records for the year will show:

A) overapplied overhead of $30,000
B) underapplied overhead of $30,000
C) underapplied overhead of $6,000
D) overapplied overhead of $6,000