Dukes corporation used a predetermined overhead rate this year of $2 per direct labor-hour, based on an estimate of 20,000 direct labor-hours to be worked during the year. actual costs and activity during the year were: actual manufacturing overhead cost incurred $ 38,000 actual direct labor-hours worked 18,500 the overapplied or underapplied manufacturing for the year was:

Under allocation= 1,000 underallocated

Explanation:

Giving the following information:

Dukes Corporation used a predetermined overhead rate this year of $2 per direct labor-hour, based on an estimate of 20,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred $ 38,000 Actual direct labor-hours worked 18,500

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 2*18,500= $37,000

Real overhead= 38,000

Over/under allocation= real MOH - allocated MOH

Under allocation= 38,000 - 37,000= 1,000 underallocated

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