Mahler, Inc

Multiple Choice

Mahler, Inc., applies manufacturing overhead at the rate of $40 per machine hour. Budgeted machine hours for the current period were anticipated to be 120,000; however, a lengthy strike resulted in actual machine hours being worked of only 90,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was:

A) overapplied by $580,000.
B) underapplied by $580,000.
C) overapplied by $1,200,000.
D) underapplied by $1,200,000.
E) underapplied by $900,000.