Question

Jackson Inc. listed the following data for 2019: 10 Budgeted factory overhead Budgeted direct labor hours Budgeted machine hours Actual factory overhead Actual direct Labor hours Actual machine hours $1,505,000 86,000 43,000 1,150,400 88,300 41,400 points If overhead is applied based on direct labor hours, overapplied/underapplied overhead is (round calculations to 2 significant digitsh

Answer 1

Ans.	Option A	$394,850	over applied
	Predetermined overhead rate =   Budgeted factory overhead / Budgeted direct labor hours
			$1,505,000 / 86,000
			$17.50	per direct labor hour
	Applied overhead = Actual direct labor hours * Predetermined overhead rate
			88,300 * $17.50
			$1,545,250
	Over applied overhead = Applied overhead - Actual overhead
			$1,545,250 - $1,150,400
			$394,850
	If the applied overhead is higher than the Actual overhead
	it means that the overhead is over applied.