Smith Paints Allocates Overhead Based on Machine Hours The Estimates Were Made as of the Beginning of the the Most

question 223

Multiple Choice

Smith Paints allocates overhead based on machine hours.Selected data for the most recent year follow. $$\begin{array} { | l | r | } \hline \text { Estimated manufacturing overhead cost } & \$ 250,000 \\\hline \text { Actual manufacturing overhead cost } & \$ 230,000 \\\hline \text { Estimated machine hours } & 20,000 \\\hline \text { Actual machine hours } & 21,000 \\\hline\end{array}$$ The estimates were made as of the beginning of the year,while the actual results were for the entire year.
The manufacturing overhead for the year would have been:

• A)$32,500 overallocated.
• B)$32,500 underallocated.
• C)$20,000 overallocated.
• D)$20,000 underallocated.

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