Question: Tonys Textiles uses a predetermined factory overhead rate based on machine-hours. For May, Tonys budgeted overhead was $210,000 based on a budgeted volume of 35,000

Tony’s Textiles uses a predetermined factory overhead rate based on machine-hours. For May, Tony’s budgeted overhead was $210,000 based on a budgeted volume of 35,000 machine-hours. Actual overhead amounted to $227,500 with actual machine-hours totaling 38,500.

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What was over- or under-applied manufacturing overhead in May?

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