Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning...

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Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams

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Answer 1

Answer #1

Predetermined Overhead rate = Estimated overhead/Estimated direct labor cost

= 404,700/213,000 = 190% of dl cost

Applied overhead = 190% * 217,000 = 412,300

Actual overhead = 424,000

So, overhead is underapplied by 11,700

Option C

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Answer 2

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