Solution:
Actual machine hours = 2,000 machine hours
Per-determined overhead rate = $50 per machine hour
Applied manufacturing overhead = Actual machine hour multiply with Predetermined overhead rate
= $50 multiply with 2,000 machine hours = $100,000
Underapplied overhead = $5,000
Thus, in order to calculate manufacturing overhead cost that has been incurred, the following costs will be added
Actual manufacturing overhead incurred = Applied manufacturing overhead + Underapplied overhead = $100,000 + $5,000 = $105,000
Hence, Answer is A.$105,000
