Reference no: EM132542003
Estimated data for Lorien Company for Year 1 are as follows:
Direct materials to be purchased...................................................... $35,000
Indirect labor.......................................................................................... 10,000
Wages of janitors in corporate office building................................. 47,000
Factory building rent............................................................................. 60,000
Depreciation on production equipment............................................. 20,000
Administrative office supplies............................................................. 25,000
Estimated direct labor hours: 40,000 hours
Actual data for Year 1 are as follows:
Total manufacturing overhead: $110,000
Direct labor hours: 35,000 hours
Question 1: The predetermined manufacturing overhead rate is determined on the basis of direct labor hours. Which ONE of the following statements is TRUE?
- Applied overhead was LESS than actual overhead by $20,000
- Applied overhead was LESS than actual overhead by $10,000
- Applied overhead was MORE than actual overhead by $31,250
- Applied overhead was MORE than actual overhead by $10,000
- Applied overhead was LESS than actual overhead by $31,250
- Applied overhead was MORE than actual overhead by $12,250
- Applied overhead was MORE than actual overhead by $20,000
- Applied overhead was LESS than actual overhead by $12,250