Question: Sandross, Inc. applies overhead based on direct labor hour using a job-order costing system. The company estimated the following annual amounts: Estimated manufacturing overhead $42,000

Sandross, Inc. applies overhead based on direct labor hour using a job-order costing system. The company estimated the following annual amounts:

Estimated manufacturing overhead $42,000

Estimated direct labor 1,500 hours at $15 per hour

Actual amounts for the year were:

Actual manufacturing overhead $43,000

Actual direct labor 1,550 hours at $16 per hour

How much is over or underapplied overhead?

$600 underapplied
$400 underapplied
$600 overapplied
$3,313 underapplied
$400 overapplied

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