The Crawford Company forecasts that total overhead for the current year will be

Question

The Crawford Company forecasts that total overhead for the current year will be $12,000,000 and that total machine hours will be 200,000 hours. Year to date, the actual overhead is $4,000,000 and the actual machine hours are 100,000 hours. If the Crawford Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) the overhead is over/under applied by








a.

$4,000,000 over.











b.

$2,000,000 over.











c.

$4,000,000 under.











d.

$2,000,000 under.

Explanation / Answer

c

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