The Owens Company Uses the Machine Hour Method of Applying

Multiple Choice

The Owens Company uses the machine hour method of applying factory overhead to production.The budgeted factory overhead last year was $200,000,and there were 40,000 machine hours budgeted.Actual machine hours incurred during the period were 38,000,and actual factory overhead was $215,000.What was the amount of under- or overapplied factory overhead?

A) $10,000 underapplied
B) $15,000 underapplied
C) $25,000 underapplied
D) $10,000 overapplied