Please provide detailed instructions Thank youSolution Overh

Please provide detailed instructions. Thank you.

Solution

Overhead applied under traditional method = MHs actually incurred*POHR for the period = 258000*5.5= $1419000 Estimated overhead for the period = 250000*5.5= $1375000 POHR based on capacity = 1375000/275000= $5 Overhead applied based on capacity = 258000*5= $1290000 Difference in overhead applied under both methods = 1419000-1290000 = $129000 Option B is correct