Under-absorption of overheads Steps:

• Calculate predetermined overhead rate: $80,000 budgeted overhead ÷ 5,000 budgeted hours =$16 per hour.
• Calculate absorbed overhead: $16 × 4,500 actual hours =$72,000.
• Under-absorption means actual overhead exceeds absorbed: actual overhead = $72,000 +$12,000 under-absorbed = $84,000. Why D is correct:
• Under-absorption equals actual overhead minus absorbed overhead, so actual = absorbed + under-absorption. Why the others are wrong:
• A: Equals absorbed overhead using budgeted rate on actual hours, ignoring under-absorption.
• B: Possible miscalculation of rate or partial adjustment.
• C: Equals absorbed overhead only, omitting under-absorption addition.

Final answer: D