The records of Family Manufacturing show the following information: $\begin{array}{lr}
\text { Estimated manufacturing overhead } & \$ 690,000 \
\text { Estimated machine hours } & 46,000 \
\text { Actual machine hours worked } & 50,000\\
\text { Actual costs incurred: } & \
\text { Indirect materials } & \$ 170,000 \
\text { Indirect labor } & 230,000 \
\text { Utilities } & 120,000 \
\text { Insurance } & 100,000 \
\text { Rent } & 80,000
\end{array}$
The amount of overapplied or underapplied overhead is
A)$10,000 underapplied.
B)$50,000 overapplied.
C)$60,000 overapplied.
D)$65,200 underapplied.

Question

Quizplus · Accepted Answer

The amount of overhead applied is $690,000 (46,000 x $15). The actual overhead incurred is $600,000 ($170,000 + $230,000 + $120,000 + $100,000 + $80,000). Therefore, the overhead is overapplied by $90,000 ($690,000 - $600,000).

The Records of Family Manufacturing Show the Following Information The Amount of Overapplied or Underapplied Overhead Is A)$10,000 Underapplied

The Records of Family Manufacturing Show the Following Information The Amount of Overapplied or Underapplied Overhead Is
A)$10,000 Underapplied