What was brainpower over- or under-applied overhead

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Question - CDS is an Advertising Agency that uses a job costing system. It applies overhead to jobs based on direct professional labour hours. At the beginning of the year, overhead was estimated to be $75,000, direct professional labour hours were estimated to be 15,000, and direct professional labour cost was projected to be $225,000. During the year, CDS incurred actual overhead of $80,000, actual direct labour hours of 14,500, and actual direct labour cost of $222,000. What was Brainpower's over- or under-applied overhead during the year?

a. $5,000 under-applied.

b. $5,000 over-applied.

c. $7,500 under-applied.

d. $7,500 over-applied.

e. Cannot be determined by the information given.

Reference no: EM132853247

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