Scottso Corporation applies overhead using an actual costing approach.Budgeted factory overhead was $266,400,budgeted machine-hours were 18,500.Actual factory overhead was $287,920,actual machine-hours were 19,050.How much is the Over- or underapplied overhead?

Question

Quizplus · Accepted Answer

In an actual costing approach, overhead is applied based on actual costs and actual activity levels. Therefore, there is no over- or underapplied overhead because the actual overhead costs are directly assigned to products.

Scottso Corporation Applies Overhead Using an Actual Costing Approach