Teresa summerlin manufactures hand crafted pottery. Overhead is applied to products based on direct labor...
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Accounting
Teresa summerlin manufactures hand crafted pottery. Overhead is applied to products based on direct labor hours. At the beginning of the current year, Teresa estimated total overhead costs would be $30,000 and estimated direct labor hours would be 20,000. Actual overhead costs for the year totaled $36,000 for 18,000 actual direct labor hours.
By how much was overhead underapplied for the year?
A. $2,600 underapplied
B. $9,000 underapplied
C. $3,000 underapplied
D. $6,000 underapplied
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