Reyes Corporation Applies Overhead Using a Normal Costing Approach Based

question 154

Multiple Choice

Reyes Corporation applies overhead using a normal costing approach based upon machine-hours. Budgeted factory overhead was $232,750, budgeted machine-hours were 17,500. Actual factory overhead was $227,830, actual machine-hours were 16,150.
- How much is the over- or underapplied overhead?

• A) $13,035 overapplied.
• B) $13,035 underapplied.
• C) $4,920 overapplied.
• D) $4,920 underapplied.

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Definitions:

Capacity

The legal ability or competency of an individual or entity to enter into binding contracts, including being of legal age and sound mind.

Delegable Obligations

Responsibilities or duties that can be transferred from one party to another, typically within a contract or legal agreement.

Authorized Agent

an individual or entity that has been legally empowered to act on behalf of another person or entity in business transactions or legal matters.

Express Authority

Power granted to an agent by explicit instructions from the principal, either verbally or in writing, defining the agent's tasks or limits.