Determine over or under applied overhead from the facts

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Reference no: EM13355975

Determine over or under applied overhead from the facts given.

The following information was extracted from the accounting records of Bowater Company:

Estimated manufacturing overhead	$260,000
Estimated machine hours	7,500
Actual machine hours worked	8,000
Actual overhead costs incurred:
Indirect materials	$97,500
Indirect labor	$60,000
Utilities	$10,000
Insurance	$25,000
Rent	$70,000

Bowater's amount of overapplied or underapplied overhead would be (round the rate to two decimal places)

a. $18,750 underapplied
b. $16,250 overapplied
c. $14,860 overapplied
d. $2,500 underapplied

Reference no: EM13355975

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