Quiz 15

labor cost. Watson's budgeted factory overhead was $756,000 based on a budgeted volume of 60,000 direct labor
hours, at a standard direct labor rate of $7.20 per hour. Actual factory overhead amounted to $775,000 with
actual direct labor cost of $450,000 for the year ended December 31. How much was Watson's overapplied
factory overhead? (M)
A. $12,500 C. $19,000
B. $18,000 D. $37,000 Gleim

Under-Applied
i
. The Kelley Company uses a predetermined overhead rate of $9 per direct labor hour to apply overhead. During
the year, 30,000 direct labor hours were worked. Actual overhead costs for the year were $240,000. The
overhead variance is (E)
a. $27,000 overlapped c. $30,000 underapplied
b. $26,670 underapplied d. $24,000 overapplied H&M

38. Bonds Company uses the equation $300,000 + $1.75 per direct labor hour to budget manufacturing overhead.
Bonds has budgeted 125,000 direct labor hours for the year. Actual results were 110,000 direct labor hours,
$297,000 fixed overhead, and $194,500 variable overhead. The total overhead variance for the year is (E)
a. $1,000. c. $35,000
b. $48,000. d. $36,000. L & H 10e

29. Malcolm Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing
overhead to jobs.
On September 1, the estimates for the month were:
Manufacturing overhead $17,000
Direct labor hours 13,600
During September, the actual results were:
Manufacturing overhead $18,500
Direct labor hours 12,000
The cost records for September will show: G & N 10e
A. Overapplied overhead of $1,500. C. Overapplied overhead of $3,500.
B. Underapplied overhead of $1,500. D. Underapplied overhead of $3,500.
i
.
Applied overhead ($9 x 30,000) $270,000
Actual overhead 240,000
Overapplied overhead $ 30,000