Rist Corporation Uses a Predetermined Overhead Rate Based on Machine-Hours

question 3

Multiple Choice

Rist Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation estimated that it would incur $255,000 in manufacturing overhead during the year and that it would work 100,000 machine-hours. The Corporation actually worked 105,000 machine-hours and incurred $270,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year?

• A) $15,000 overapplied
• B) $15,000 underapplied
• C) $2,250 overapplied
• D) $2,250 underapplied

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