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Problem - James Corporation applies overhead based on direct labor hours. At the beginning of the year, James estimates manufacturing overhead to be $480,000, machine hours to be 120,000 and direct labor hours to be 80,000. During January, James has 6,700 direct labor hours and 11,000 machine hours.
If the actual overhead for January is $41,000, what is the overhead variance and is it overapplied or underapplied?
A. $800 overapplied
B. $3,000 underapplied
C. $800 underapplied
D. $3,000 overapplied
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