The Management of Chaloux Corporation Would Like to Investigate the Possibility

Multiple Choice

The management of Chaloux Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity.The Corporation's controller has provided an example to illustrate how this new system would work.In this example, the allocation base is machine-hours. If the Corporation bases its predetermined overhead rate on capacity, by how much was manufacturing overhead underapplied or overapplied?

A) $9, 792 Overapplied
B) $1, 344 Overapplied
C) $9, 792 Underapplied
D) $1, 344 Underapplied