Acton Corporation which applies manufacturing overhead on th

Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $361,260 Estimated machine-hours 2,700 Actual manufacturing overhead $354,700 Actual machine-hours 2,660 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company\'s predetermined overhead rate for the year. The overhead for the year was: Noreen 4e Recheck 2017-16-03

$5,352 underapplied

$5,352 overapplied

$1,208 underapplied

$1,208 overapplied

Solution

Correct Answer $1208 Overapplied

Calculations

A

Estimated Manufacturing Overheads

$ 361,260.00

B

Estimated Machine Hours

2700

C=A/B

Predetermined Overheads

$          133.80

D

Actual Machine Hours

2660

E=C*D

Applied Overheads

$ 355,908.00

F

Actual Manufacturing Overheads

$ 354,700.00

G=E-F

Over applied Manufacturing Overheads

$      1,208.00

When Manufacturing overheads applied are more than Actual Overheads Incurred then it is called to be Over applied.