Barefoot Running Company's work in process inventory on June 1 has a balance of $22,900 representing Job No. 265. During June, $50,700 of direct materials were requisitioned for Job No. 265 and $35,500 of direct labor cost was incurred on Job No. 265. Manufacturing overhead is allocated at 130% of direct labor cost. Actual manufacturing overhead costs incurred in June amounted to $41,300. No new jobs were started during June. Job No. 265 is completed on June 28.Is manufacturing overhead overallocated or underallocated for the month of June? By how much?A. $4,850 overallocatedB. $4,850 underallocatedC. $11,530 underallocatedD. $11,530 overallocated

Job No. 265 incurred $35,500 on direct labor costs. Manufacturing overhead is allocated at 130% of direct labor cost. The actual manufacturing overhead costs incurred in June amounted to $41,300.

First, we need to calculate the manufacturing overhead allocated:

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

Allocated MOH= 1.30*35,500= $46,150

Now, we can calculate the under/over allocation:

Over/under allocation= real MOH - allocated MOH= 41,300 - 46,150= 4,850 overallocated