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Sarasota Copy Company applies batch-related manufacturing overhead on the basis of the number of production runs. The following information is available:

-The amount of over/underapplied manufacturing overhead is:
A)$71,370 underapplied
B)$54,250 underapplied
C)$17,120 underapplied
D)$54,250 overapplied

Question

Use the following to answer questions 
Sarasota Copy Company applies batch-related manufacturing overhead on the basis of the number of production runs. The following information is available:
 
-The amount of over/underapplied manufacturing overhead is:
A)$71,370 underapplied 
B)$54,250 underapplied 
C)$17,120 underapplied 
D)$54,250 overapplied

Quizplus · Accepted Answer

To calculate the amount of over/underapplied manufacturing overhead, we need to compare the actual manufacturing overhead with the applied manufacturing overhead.

Actual manufacturing overhead = $266,120 
Applied manufacturing overhead = $249,000 (24 production runs x $10,375 per run)

Therefore, the amount of underapplied manufacturing overhead = Actual manufacturing overhead - Applied manufacturing overhead 
= $266,120 - $249,000 
= $17,120

Therefore, the correct answer is C: $17,120 underapplied.

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