The painting department allocates overhead on the basis of machine hours.

In June, estimated overhead was $116,000 and actual overhead was $130,000. The estimated machine hours were 29,000 hours and the actual machine hours were 28,000 hours. Therefore, overhead was:

Question

The painting department allocates overhead on the basis of machine hours.

In June, estimated overhead was $116,000 and actual overhead was $130,000. The estimated machine hours were 29,000 hours and the actual machine hours were 28,000 hours. Therefore, overhead was:

BlackTom AI · Accepted Answer

Predetermined overhead rate = estimated overhead ÷ estimated machine hours. This rate is then used to apply overhead to production based on actual machine hours; any difference between actual overhead incurred and overhead applied is either underapplied (actual > applied) or overapplied (applied > actual).

1. Relevant concepts:
- Predetermined overhead rate (POHR) = Estimated overhead / Estimated activity (machine hours).
- Applied overhead = POHR × Actual machine hours.
- Underapplied overhead = Actual overhead − Applied overhead (if positive).
- Overapplied overhead = Applied overhead − Actual overhead (if positive).

2. Step-by-step reasoning and calculations:
- Estimated overhead = $116,000.
- Estimated machine hours = 29,000 hours.
- POHR = $116,000 ÷ 29,000 hrs = $4.00 per machine hour.
- Actual machine hours = 28,000 hrs.
- Applied overhead = POHR × Actual hrs = $4.00 × 28,000 = $112,000.
- Actual overhead incurred = $130,000.
- Difference = Actual overhead − Applied overhead = $130,000 − $112,000 = $18,000.

3. Intermediate steps shown above (division for rate, multiplication for applied overhead, subtraction for difference).

4. Why the correct answer is correct:
Because the company applied $112,000 of overhead using the predetermined rate, but actually incurred $130,000 in overhead costs, the applied amount falls short by $18,000. That shortfall is called underapplied overhead.

5. Why the other options are incorrect:
- $18,000 overapplied: wrong sign — applied ($112,000) is less than actual ($130,000), so it cannot be overapplied.
- $4,000 underapplied: $4,000 is the product of the $1 difference in hours (29,000 − 28,000 = 1,000 hrs) times $4 rate would actually be $4,000, but that misinterprets the calculation; the correct shortfall is based on applied vs. actual overhead, not the difference in estimated vs. actual hours alone.
- $14,000 overapplied: $14,000 equals actual minus estimated overhead ($130,000 − $116,000) but this compares actual to estimate, not applied to actual, so it is not the measure of under-/overapplied overhead.

Conclusion: Overhead was $18,000 underapplied, which matches the provided correct answer.

The painting department allocates overhead on the basis of machine hours. In June, estimated overhead was $116,000 and actual overhead was $130,000. The estimated machine hours were 29,000 hours and the actual machine hours were 28,000 hours. Therefore, overhead was:单项选择题

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