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Problem - Manufacturing overhead - over/underapplied - LampArt Co. makes specialty table lamps. Manufacturing overhead is applied to production on a direct labor hours basis. During November, the first month of the company's fiscal year, $173,250 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of $15 per direct labor hour.
Required:
a. Calculate the number of hours of direct labor used during November.
b. Actual manufacturing overhead costs incurred during November totaled $166,425. Calculate the amount of over - or underapplied overhead at the end of November.
c. Identify two possible explanations for the over-or underapplied overhead.
d. Explain the accounting appropriate for the over - or underapplied overhead at the end of November.
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