1. Maher, Inc., applies manufacturing overhead at the rate of $60 per machine ho
ID: 2601539 • Letter: 1
Question
1. Maher, Inc., applies manufacturing overhead at the rate of $60 per machine hour. Budgeted machine hours for the current period were anticipated to be 80,000; however, actual machine hours being worked were 65,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was: A. underapplied by $280,000. B. overapplied by S620,000. C. underapplied by S620,000. D. overapplied by $280,000.Explanation / Answer
Budgeted Machine hours: 80000
Actual machine hours: 65000
Variance (80000-65000) = 15000
Applied manufactured overhead rate = $60 per machine hour
Actual Manufacturing overhead: 4,180,000 + (15000*$60) = $5,080,000
Under applied overhead = $5,080,000 - $4,800,000 = $280,000
A.UNDERAPPLIED BY $280,000
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