AFD Production uses a predetermined overhead rate based upon direct labour hours.

The firm has the following budgeted and actual data for the current year:

Budgeted factory overhead cost $6000

Actual factory overhead cost $5000

Budgeted direct labour hours 1000

Actual direct labour hours 1100

What was the amount of underapplied or overapplied overhead for the year?

Select one:

a.

$1600 overapplied

b.

$500 overapplied

c.

$500 underapplied

d.

$1600 underapplied