Question: VBK, Inc., applies overhead costs to its products using direct labor costs as its cost driver. For the most recent year, its budgeted overhead costs
VBK, Inc., applies overhead costs to its products using direct labor costs as its cost driver. For the most recent year, its budgeted overhead costs were $525,000, and its budgeted direct labor costs were $150,000.
During the year, VBK actually paid $140,000 for direct labor, and actual overhead costs were $530,000.
Required:
Determine the firm’s over- or underapplied overhead.
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