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

question 130

Essay

Gaters 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 labor-hours allowed for the actual output of the period.Data concerning the most recent year appear below: The company incurred a total of $240,080 in manufacturing overhead cost during the year.
Required:
Determine whether overhead was underapplied or overapplied for the year and by how much.

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Definitions:

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