Scottso Corporation Applies Overhead Using a Normal Costing Approach Based

question 71

Multiple Choice

Scottso Corporation applies overhead using a normal costing approach based upon machine-hours.Budgeted factory overhead was $266,400,budgeted machine-hours were 18,500.Actual factory overhead was $287,920,actual machine-hours were 19,050.How much is the Over- or underapplied overhead?

• A)$21,520 underapplied.
• B)$13,600 underapplied.
• C)$7,920 overapplied.
• D)$0.

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Definitions:

Revenue

The total income generated by the sale of goods or services related to a company's primary operations before any costs or expenses are deducted.

Account Receivable

Signifies the amount of money that customers owe a company for products or services that have been provided but are still unpaid.

Accounting Equation

The foundational formula in accounting, represented as Assets = Liabilities + Equity, underscoring the balance sheet structure.

Stockholders' Equity

The ownership interest of shareholders in the assets of a company, calculated as total assets minus total liabilities.