Manufacturing overhead applied on the basis of direct labor-hours was $120,000, while actual manufacturing overhead incurred was $124,000 for the month of April. Which of the following is always true given the statement above? Actual direct labor-hours were less than budgeted direct labor-hours. Overhead was overapplied by $4,000. Overhead was underapplied by $4,000. Actual direct labor-hours exceeded budgeted direct labor-hours.
Manufacturing overhead applied on the basis of direct labor-hours was $120,000, while actual manufacturing overhead incurred was $124,000 for the month of April. Which of the following is always true given the statement above? Actual direct labor-hours were less than budgeted direct labor-hours. Overhead was overapplied by $4,000. Overhead was underapplied by $4,000. Actual direct labor-hours exceeded budgeted direct labor-hours.
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Question
Manufacturing overhead applied on the basis of direct labor-hours was $120,000, while actual manufacturing overhead incurred was $124,000 for the month of April. Which of the following is always true given the statement above?
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Actual direct labor-hours were less than budgeted direct labor-hours.
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Overhead was overapplied by $4,000.
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Overhead was underapplied by $4,000.
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Actual direct labor-hours exceeded budgeted direct labor-hours.
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