Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $$160,000$ and direct labour hours would be $8,000.$ The actual figures for the year were $$184,000$ for manufacturing overhead and $13,000$ direct labour hours. The cost records for the year will show which of the following?

Question $6$Answer

a$.$

Underapplied overhead of $$260,000$

b$.$

Overapplied overhead of $$76,000$

c$.$

Underapplied overhead of $$76,000$

d$.$

Overapplied overhead of $$260,000$