Has manufacturing overhead at Sailor Manufacturing Company been overallocated or underallocated and by what amount as of January 31?

Question

Quizplus · Accepted Answer

The given information indicates that actual manufacturing overhead incurred was $275,000, while the manufacturing overhead applied was $268,600. Therefore, manufacturing overhead was underallocated, as more was incurred than applied. To calculate the amount of underallocation, we can subtract applied overhead from actual overhead incurred:
$275,000 - $268,600 = $6,400
Therefore, choice C is the correct answer as manufacturing overhead was underallocated by $6,400 as of January 31.

Has Manufacturing Overhead at Sailor Manufacturing Company Been Overallocated or Underallocated