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Heller Cannery, Inc. uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company estimated that it would incur $510,000 in manufacturing overhead during the year and that it would work 100,000 machine-hours. The company actually worked 105,000 machine-hours and incurred $540,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year?

a) $4,500 overapplied

b) $4,500 underapplied

c) $30,000 overapplied

d $30,000 underapplied

Accounting Basics, Accounting

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  • Reference No.:- M940044

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