Stakes Industries Ltd. allocates overhead at a rate of $7.50 per machine hour. This is based on budgeted overhead costs of $300,000 and 40,000 machine hours. During the year Stakes incurred the following costs and activity:
Depreciation on factory building and equipment - $245,000
Indirect materials used - $12,500
Property taxes on factory - $10,500
Sales staff salaries - $105,000
Delivery drivers wages - $48,000
Factory janitor wages - $38,000
Machine hours used - 32,400

Based on this information is manufacturing overhead over- or under-applied for the period and by how much?

A) $111,000 under-applied

B) $6,000 over-applied

C) $63,000 under-applied

D) $73,000 under-applied

Answer rating: 100% (QA)

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