Omega Tools Ltd. estimated its total annual overhead to be $15,000,000 and total machine hours to be 300,000 hours. So far, it incurred $9,000,000 in actual overhead and used 150,000 machine hours. Is overhead over- or under-applied, and by how much?

Omega Tools Ltd. estimated its total annual overhead to be $15,000,000 and total machine hours to be 300,000 hours. So far, it incurred $9,000,000 in actual overhead and used 150,000 machine hours. Is overhead over- or under-applied, and by how much?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 2PB: Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500...

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Please provide the accurate answer to this general accounting problem using valid techniques.

Omega Tools Ltd. estimated its total annual overhead to be $15,000,000
and total machine hours to be 300,000 hours.
So far, it incurred $9,000,000 in actual overhead and used 150,000
machine hours.
Is overhead over- or under-applied, and by how much?

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