Use the Following Information for the Next 2 Questions

question 11

Multiple Choice

Use the following information for the next 2 questions.
Allen, Inc. has budgeted $120,000 in variable overhead and $72,000 in fixed overhead for the current month. 8,000 custom units were expected to be produced using 60,000 machine hours. During the month, Allen actually used 68,096 machine hours and produced 8,960 units. Actual overhead costs were: $132,000 variable and $73,600 fixed.
-Assume Allen uses an actual costing system. The amount of over- or underapplied overhead for the current month is

• A) $9,440 overapplied
• B) $12,307 overapplied
• C) $0
• D) $13,600 overapplied

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Definitions:

Title

The legal right to own, use, or dispose of property or assets.

Seller

refers to an individual or entity that offers goods or services for sale to consumers or other businesses.

Merchant

An individual or business engaged in the selling of goods or services, especially those involved in wholesale or retail trade.

Risk of Loss

Refers to the financial and legal responsibility for damage, destruction, or loss of goods, usually determined by the terms of sale like F.O.B.