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Sullivan Company Uses a Predetermined Overhead Rate Based on Machine

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Sullivan Company uses a predetermined overhead rate based on machine hours to allocate manufacturing overhead to jobs.The company estimated that it would incur $500,000 of manufacturing overhead during the year and that 200,000 machine hours would be used.During the year,the company actually incurred manufacturing overhead costs of $590,000 and 220,000 machine hours were used. By how much was manufacturing overhead overallocated or underallocated for the year?

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Definitions:

Civil Service Commission

A government body charged with overseeing the hiring and management of federal government employees to ensure a merit-based, non-partisan civil service.

Pendleton Act

Legislation passed in 1883 that established the United States Civil Service Commission, which ended the spoils system and made merit the basis for hiring and promoting in the federal service.

Merit System

An approach to hiring and promoting government employees based on their ability and performance rather than political connections or factors.

Political Appointment System

A system where government officials are appointed based on their political affiliations and loyalty rather than merit or competitive examination.

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