Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25, 000 machine-hours and $10, 000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26, 200 machine-hours and $11, 300 of manufacturing overhead. What was Chipatas underapplied or overapplied overhead for the year?

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25, 000 machine-hours and $10, 000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26, 200 machine-hours and $11, 300 of manufacturing overhead. What was Chipata’s underapplied or overapplied overhead for the year?

A	$480 overapplied
B	$820 underapplied
C	$1, 300 overapplied
D	$1, 300 underapplied

Explanation:

Detailed explanation-1: -Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25, 000 machine-hours and $10, 000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26, 200 machine-hours and $11, 400 of manufacturing overhead.

Detailed explanation-2: -Acheson Corporation, which applies manufacturing overhead on the basis of machine hours, has provided the following data for its most recent year of operations.

Detailed explanation-3: -Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $325, 000 for the year, and machine usage is estimated at 125, 000 hours. For the year, $342, 000 of overhead costs are incurred and 130, 000 hours are used.

Detailed explanation-4: -Pleiss Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company’s standard variable manufacturing overhead rate is $2.40 per machine-hour. The actual variable manufacturing overhead cost for the month was $5, 240.

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