Gaters Incorporated Makes a Single Product--An Electrical Motor Used in Many

Essay

Gaters Incorporated makes a single product--an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:
The company incurred a total of $240,080 in manufacturing overhead cost during the year.
Required:
Determine whether overhead was underapplied or overapplied for the year and by how much.