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Problem - Hamilton Pty Ltd uses a standard costing system for product costing. The company uses direct labour hours as the cost overhead costs. The following amounts were budgeted for the year:
Planned production-units 50 000
Direct labour hours 200 000
Variable overhead $1 000 000
Fixed overhead $600 000
The following were the actual results: Actual production-units 48 000
Direct labour hours 195 000
Variable overhead $950 000
Fixed overhead $610 000
Required - Calculate the total amount of underapplied or overapplied manufacturing overhead.
A. $80 000 underapplied
B. $64 000 underapplied
C. $50 000 overapplied
D. $24 000 underapplied
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