Rist Corporation Uses a Predetermined Overhead Rate Based on Machine-Hours

Multiple Choice

Rist Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation estimated that it would incur $255,000 in manufacturing overhead during the year and that it would work 100,000 machine-hours. The Corporation actually worked 105,000 machine-hours and incurred $270,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year?

A) $15,000 overapplied
B) $15,000 underapplied
C) $2,250 overapplied
D) $2,250 underapplied