The Coastal Landscaping and Snow Removal company uses normal costing to assign overhead costs to the firm’s various jobs. Labor is charged to jobs at $25 per hour and for the upcoming winter session, overhead is estimated at $200,000 for $10,000 hours of activity.
A. Using normal costing, what would be the total charge for removing snow from a mall parking lot that took four hours to clear?
B. If actual overhead costs are $215,000 and actual hours worked are 11,000, is overhead overapplied or underapplied?