Mallet Music Company makes custom marimbas and xylophones. Since much of the work on these musical instruments is done by hand, the company uses direct labor hours as its manufacturing overhead application base. The company’s annual budgeted overhead costs for 40,000 direct labor hours totaled $640,000.
Required
a. Assume that during the year, the company incurred manufacturing overhead totaling $672,000 for 43,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year?
b. Assume that during the year, the company incurred manufacturing overhead totaling $672,000 for 41,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year?
c. Assume that during the year, the company incurred manufacturing overhead totaling $626,000 for 40,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year?
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