Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or overapplied manufacturing overhead

For FreeFall Company, the predetermined overhead rate is 150% of direct labor cost. During the month, FreeFall incurred $100,000 of factory labor costs, of which $85,000 is direct labor and $15,000 is indirect labor. Actual overhead incurred was $120,000.

Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or overapplied manufacturing overhead.

SOLUTION