O'Fallon Products Estimates Manufacturing Overhead of $400,000 for 2019 and Applies

question 12

Multiple Choice

O'Fallon Products estimates manufacturing overhead of $400,000 for 2019 and applies overhead to units produced based on 200,000 machine hours.During 2019, O'Fallon generated 195,120 machine hours and incurred $409,752 of manufacturing overhead.For 2019, O'Fallon's under/overapplied overhead is:

• A)$4,880 underapplied.
• B)$9,752 underapplied.
• C)$9,752 overapplied.
• D)$19,512 underapplied.

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Definitions:

Owners' Equity

The residual interest in the assets of a business after deducting liabilities, representing the owners' claims against the company’s resources.

Capital Balances

The amount of money that partners or owners have contributed to a business or the retained earnings within a company.

Income Ratio

A financial metric that compares specific income components to total revenue or other earnings measures, often used to assess profitability or operational efficiency.

Capital Balance

Represents the amount of funds contributed by investors or owners plus retained earnings in a company.