The Owens Company Uses the Machine Hour Method of Applying

question 44

Multiple Choice

The Owens Company uses the machine hour method of applying factory overhead to production.The budgeted factory overhead last year was $200,000,and there were 40,000 machine hours budgeted.Actual machine hours incurred during the period were 38,000,and actual factory overhead was $215,000.What was the amount of under- or overapplied factory overhead?

• A)$10,000 underapplied
• B)$15,000 underapplied
• C)$25,000 underapplied
• D)$10,000 overapplied

---

Definitions:

Discount Period

The time frame between the date of a bill's issuance and its payment due date, during which a payment discount may be available.

Payment

A transaction in which money is exchanged for goods or services.

Purchase

The process of purchasing products, services, or assets by paying money or something of similar value.

Merchandise

Goods that are bought and sold in the normal course of business, typically in a retail or wholesale setting.