Teresa Summerlin Teresa Summerlin manufactures hand-crafted pottery. Overhead is applied to products based on direct labor hours. At the beginning of the current year, Teresa estimated total overhead costs would be $30,000 and estimated direct labor hours would be 20,000. Actual overhead costs for the year totaled $36,000 for 18,000 actual direct labor hours. Refer to the Teresa Summerlin
information above. By how much was overhead underapplied for the year?
A) $2,600 underapplied
B) $9,000 underapplied
C) $3,000 underapplied
D) $6,000 underapplied
B
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