Reade Incorporated Makes a Single Product--An Electrical Motor Used in Many

question 90

Multiple Choice

Reade Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:
The total manufacturing overhead is underapplied or overapplied by how much?

• A) $61,347 Underapplied
• B) $32,395 Underapplied
• C) $61,347 Overapplied
• D) $32,395 Overapplied

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Definitions:

Toe-in

It refers to the alignment adjustment of vehicle wheels in which the front of the tires are closer to each other than the rear, promoting straight-line stability.

Feather-edge Wear

Wear pattern on tires or brakes characterized by a tapered condition where one edge is significantly thinner than the opposite edge, often resulting from improper alignment.

Scuffing

Wear caused by friction between two moving surfaces without adequate lubrication, often seen in engine parts.

Negative Camber

A wheel alignment setting where the top of the wheel is tilted inward towards the vehicle, improving cornering performance at the expense of tire wear.