Thomlin Company Forecasts That Total Overhead for the Current Year

question 173

Multiple Choice

Thomlin Company forecasts that total overhead for the current year will be $15,000,000 with 300,000 total machine hours. Year to date, the actual overhead is $16,000,000, and the actual machine hours are 330,000 hours. If Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) , the overhead is

• A) $1,000,000 overapplied
• B) $1,000,000 underapplied
• C) $500,000 overapplied
• D) $500,000 underapplied

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