Caple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,660. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour.
-The overhead for the year was:
A) $714 overapplied
B) $7,626 underapplied
C) $714 underapplied
D) $7,626 overapplied

Question

Quizplus · Accepted Answer

Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours
= $11.90 per machine-hour × 1,460 machine-hours
= $17,374
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Caple Corporation Applies Manufacturing Overhead on the Basis of Machine-Hours