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18 August, 17:47

Brusveen Corporation applies manufacturing overhead to jobs on the basis of direct labor-hours. The following information relates to Brusveen for last year: Estimated Actual Direct labor-hours 15,000 14,800 Manufacturing overhead cost $300,000 $287,120 What was Brusveen's underapplied or overapplied overhead for last year? $4,000 underapplied $8,880 underapplied $8,880 overapplied $9,000 underapplied

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  1. 18 August, 21:27
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    The correct answer is C: $8,880 overapplied

    Explanation:

    Giving the following information:

    Applies manufacturing overhead to jobs based on direct labor-hours.

    The following information relates to Brusveen for last year: Estimated Direct labor-hours = 15,000

    Actual direct labor-hours = 14,800

    Estimated Manufacturing overhead cost = $300,000

    Actual Manufacturing overhead cost = $287,120

    Overhead rate = 300000/15000 = $20hour

    Allocated overhead = $20*14800 = $296,000

    Overhead variance = real overhead - allocated overhead = 287120 - 296000 = 8880 favorable (overapplied)
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