Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional...
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Accounting
Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $160,000, direct professional labor hours were estimated to be 20,000, and direct professional labor cost was projected to be $360,000. During the year, Media incurred actual overhead costs of $159,000, actual direct professional labor hours of 19,500, and actual direct labor cost of $265,000. By year-end, the firm's overhead was:
$3,000 underapplied.
$3,000 overapplied.
$1,000 underapplied.
$1,000 overapplied.
$4,000 underapplied.
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