Motorsports, Inc

Multiple Choice

Motorsports, Inc. had a predetermined overhead rate of $2 per direct labor hour. The direct labor hours were estimated to be 25,000. The actual manufacturing overhead incurred was $47,000 and 24,000 actual direct labor hours were worked. How much was overhead over/under applied last year?

A) $1,000 underapplied
B) $2,000 underapplied
C) $1,000 overapplied
D) $3,000 overapplied