Question

1.Overapplied overhead will always result when a predetermined overhead rate is employed and _______

a.production is less than ideal capacity.

b.actual overhead costs are less than expected.

c.actual overhead costs are more than expected.

d.overhead incurred is less than overhead applied.

e.None of the above

2.

Wilkes Manufacturing adopted a job costing system. For the current year, budgeted cost driver activity levels for direct labor hours and direct labor costs were 20,000 and $100,000, respectively. In addition, budgeted variable and fixed factory overhead costs were $50,000 and $25,000, respectively. Actual costs and hours for the year were as follows:

Direct labor hours	21,000
Direct labor costs	$110,000
Machine hours	35,000

For a particular job, 1,500 direct labor hours were used. Using direct labor hours as the cost driver, what amount of overhead should be applied to this job?

a.$3,214

b.$5,357

c.$5,625

d.$7,500

Answer 1