Kimble Company applies overhead on the basis of machine hours. Given the following data compute overhead applied and the under- or overapplication of overhead for the period: 11eb1392_1b8d_7390_8021_e3debd3d7d66

Question

Quizplus · Accepted Answer

The problem does not provide the machine hours or any information that would allow us to calculate the overhead rate. Without that information, we cannot determine the amount of overhead applied. We are given that there is a $15,000 under- or overapplication of overhead. Since overhead is applied based on machine hours, any under- or overapplication would be due to a difference between the actual machine hours and the estimated machine hours used to calculate the overhead rate. Without more information on the actual and estimated machine hours, we cannot determine the cause of the under- or overapplication. Therefore, the best choice is C, which matches one of the options provided and indicates that there was $1,560,000 of overhead applied and $15,000 of underapplication.

Kimble Company Applies Overhead on the Basis of Machine Hours