Winston Company Estimates That the Factory Overhead for the Following

Multiple Choice

Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead costs for the year were $1,375,000. Determine the over- or underapplied amount for the year.

A) $17,500 overapplied
B) $17,500 underapplied
C) $118,250 overapplied
D) $118,250 underapplied