Heathcote Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year$546,000 Estimated direct labor-hours at the beginning of the year 42,000direct labor-hours Results of operations: Actual direct labor-hours 47,000direct labor-hoursManufacturing overhead: Indirect labor cost$152,000 Other manufacturing overhead costs incurred$454,000 Cost of goods manufactured$1,569,000 Cost of goods sold (unadjusted)$1,458,000 Manufacturing overhead is overapplied or underapplied by:
A. $5,000 Underapplied
B. $5,000 Overapplied
C. $186,000 Underapplied
D. $186,000 Overapplied
Answer: B
Business
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