**Swifty Company Overhead Application Analysis**Swifty Company applies overhead on the basis of machine hours. Given the following data, the task is to determine the overhead applied and the under- or overapplication of overhead for the period.**Data Provided:**1. **Estimated annual overhead cost:** $1,660,0002. **Actual annual overhead cost:** $1,555,0003. **Estimated machine hours:** 320,0004. **Actual machine hours:** 100,000**Question:**Based on the above data, what is the overhead applied and the corresponding under- or overapplication of overhead for the period?**Options:**- $1,660,000 applied and $1,036,250 overapplied- $1,555,000 applied and neither under- nor overapplied- $518,750 applied and $1,036,250 underapplied- $518,750 applied and $1,036,250 overapplied**Analysis:**First, we need to calculate the overhead rate per machine hour:\[ \text{Overhead rate per machine hour} = \frac{\text{Estimated annual overhead cost}}{\text{Estimated machine hours}} \]\[ \text{Overhead rate per machine hour} = \frac{1,660,000}{320,000} \]\[ \text{Overhead rate per machine hour} = $5.1875 \]Next, apply this rate to the actual machine hours to determine the applied overhead:\[ \text{Overhead applied} = \text{Overhead rate per machine hour} \times \text{Actual machine hours} \]\[ \text{Overhead applied} = 5.1875 \times 100,000 \]\[ \text{Overhead applied} = $518,750 \]To find the under- or overapplication of overhead, compare the applied overhead to the actual overhead cost:\[ \text{Difference (under- or overapplied)} = \text{Applied overhead} - \text{Actual annual overhead cost} \]\[ \text{Difference} = 518,750 - 1,555,000 \]\[ \text{Difference} = -$1,036,250 \]Since the difference is negative, this indicates underapplied overhead.**Conclusion:**The correct response is:- $518,

Name: **Swifty Company Overhead Application Analysis**Swifty Company applie
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Description: **Swifty Company Overhead Application Analysis**Swifty Company applies overhead on the basis of machine hours. Given the following data, the task is to determine the overhead applied and the under- or overapplication of overhead for the period.**Dat

Overhead cost is applied on the basis of a cost driver which is machine hours in the given…

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Swifty Company applies overhead on the basis of machine hours. Given the following data, what is the overhead applied and the under- or overapplication of overhead for the period? Estimated annual overhead cost Actual annual overhead cost Estimated machine hours Actual machine hours $1660000 $1555000 320000 100000 O $1660000 applied and $1036250 overapplied O $1555000 applied and neither under-nor overapplied $518750 applied and $1036250 underapplied O $518750 applied and $1036250 overapplied

Swifty Company applies overhead on the basis of machine hours. Given the following data, what is the overhead applied and the under- or overapplication of overhead for the period? Estimated annual overhead cost Actual annual overhead cost Estimated machine hours Actual machine hours $1660000 $1555000 320000 100000 O $1660000 applied and $1036250 overapplied O $1555000 applied and neither under-nor overapplied $518750 applied and $1036250 underapplied O $518750 applied and $1036250 overapplied

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 11PB: When setting its predetermined overhead application rate. Tasty Turtle estimated its overhead would...

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