Skyline Equipment Inc. uses a predetermined overhead rate based on machine hours. The monthly budgeted overhead is $360,000, and the budgeted machine hours are 80,000 hours. During the month, the company actually used 100,000 machine hours, and the actual overhead incurred was $470,000. What is the amount of over applied or under applied overhead at the end of the month?

Skyline Equipment Inc. uses a predetermined overhead rate based on machine hours. The monthly budgeted overhead is $360,000, and the budgeted machine hours are 80,000 hours. During the month, the company actually used 100,000 machine hours, and the actual overhead incurred was $470,000. What is the amount of over applied or under applied overhead at the end of the month?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

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