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Mansfield Corporation estimates its manufacturing overhead costs to be $160,000 and its direct labor costs to be $320,000 for 2007. The actual manufacturing labor costs were $80,000 for job 1, $120,000 for job 2 and $160,000 for job 3 during 2007. Manufacturing overhead is applied to jobs on the basis of direct labor costs using a predetermined overhead rate. The actual manufacturing overhead cost for the year was $172,000.
The amount of the manufacturing overhead variance during 2007 was:
a) $ 8,000 Overapplied
b) $12,000 Overapplied
c) $12,000 Underapplied
d) $ 8,000 Underapplied
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