The Following Information Is Provided -Refer to the Figure

question 26

Multiple Choice

The following information is provided:
$\begin{array}{lr}\text { Estimated manufacturing overhead } & \$ 690,000 \\\text { Estimated machine hours } & 46,000 \\\text { Actual machine hours worked } & 50,000\\\\\text { Actual costs incurred: }\\\text { Indirect materials } & \$ 170,000 \\\text { Indirect labour } & 230,000 \\\text { Utilities } & 120,000 \\\text { Insurance } & 100,000 \\\text { Rent } & 80,000\end{array}$
-Refer to the figure.What is the amount of overapplied or underapplied overhead?

• A)$10,000 underapplied
• B)$50,000 overapplied
• C)$60,000 overapplied
• D)$65,200 underapplied

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Definitions:

Break-Even Analysis

A financial calculation that determines the point at which total revenues equal total costs, indicating no profit or loss.

Variable Expenses

Costs that change in proportion to the level of activity or volume of output produced.

Unit Fixed Expenses

These are expenses that do not change with the level of production or sales within a certain range and are calculated per unit of product.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a finished unit of product.