“19. Precision Company used a predetermined overhead rate during 19×2 of $3 per direct labor hour, based on an estimate of 24,000 direct labor hours to be worked during the year. Actual costs and activity during 19×2 were: Actual manufacturing overhead cost incurred $84,000 Actual direct labor hours worked 27,000 The under- or overapplied overhead for 19×2 would be a. $3,000 underapplied b. $3,000 overapplied c. $12,000 underapplied d. $9,000 overapplied”,”1The under or overapplied overhead for 19×2 would be:Applied MOH = Predetermined Rate x Actual Hours3 x 27,000 = $81,000Actual MOH – Applied MOH = Over or (Under)84,000 – 81
000 = $3000 underapplied”