8. Mahler, Inc., applies manufacturing overhead at the rate of $40 per machine h

Question

8. Mahler, Inc., applies manufacturing overhead at the rate of $40 per machine hour. Budgeted machine hours for the current period were anticipated to be 120,000; however, a lengthy strike resulted in actual machine hours being worked of only 90,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was: A. overapplied by $580,000. B. underapplied by $580,000. C. overapplied by $1,200,000. D. underapplied by $1,200,000. E. underapplied by $900,000.

Explanation / Answer

A. overapplied by $580,000.

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