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The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hour will be 300,000 hours. Year to date, the actual overhead is $16,000,000, and the actual machine hours are 330,000 hours. Suppose the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead as of this point in time (year to date). In that case, the overhead is over/under applied by: A. $1,000,000 overapplied B. $1,000,000 underapplied C. $500,000 overapplied D. $500,000 underapplied

The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hour will be 300,000 hours. Year to date, the actual overhead is $16,000,000, and the actual machine hours are 330,000 hours. Suppose the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead as of this point in time (year to date). In that case, the overhead is over/under applied by: A. $1,000,000 overapplied B. $1,000,000 underapplied C. $500,000 overapplied D. $500,000 underapplied

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hour will be 300,000 hours. Year to date, the actual overhead is $16,000,000, and the actual machine hours are 330,000 hours. Suppose the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead as of this point in time (year to date). In that case, the overhead is over/under applied by: A. $1,000,000 overapplied B. $1,000,000 underapplied C. $500,000 overapplied D. $500,000 underapplied
Transcribed Image Text:The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hour will be 300,000 hours. Year to date, the actual overhead is $16,000,000, and the actual machine hours are 330,000 hours. Suppose the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead as of this point in time (year to date). In that case, the overhead is over/under applied by: A. $1,000,000 overapplied B. $1,000,000 underapplied C. $500,000 overapplied D. $500,000 underapplied
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