Question

Stoneside Inc. has provided you with the following information for its Manufacturing Overhead account at the end of the period. Actual manufacturing overhead costs incurred total $31,910. The company applied manufacturing overhead cost in the amount of $28,900. What is the overapplied or underapplied manufacturing overhead?
a) $3,010 Underapplied
b) $3,010 Overapplied
c) $5,990 Underapplied
d) $5,990 Overapplied

Answer 1

Answer:

a) $3,010 Underapplied

Explanation:

Data provided in the question:

Actual manufacturing overhead costs incurred = $31,910

Standard manufacturing overhead cost in the amount = $28,900.

Now,

The under applied manufacturing overhead

= Actual manufacturing overhead - Standard manufacturing overhead

= $31,910 - $28,900

= $3,010 under applied.

[ Since the actual manufacturing overhead is greater than the standard manufacturing overhead, Therefore it is under applied ]

Hence.

The answer is option a) $3,010 Underapplied