## Step 1: Calculate the Predetermined Overhead Rate \[ \text{Predetermined Overhead Rate} = \frac{\text{Estimated Manufacturing Overhead}}{\text{Estimated Machine Hours}} \] \[ = \frac{\$690,000}{46,000} = \$15 \text{ per machine hour} \] --- ## Step 2: Apply Overhead Based on Actual Machine Hours \[ \text{Applied Overhead} = \text{Predetermined Rate} \times \text{Actual Machine Hours} \] \[ = \$15 \times 50,000 = \$750,000 \] --- ## Step 3: Calculate Actual Overhead Incurred \[ \text{Actual Overhead} = \$170,000 + \$230,000 + \$120,000 + \$100,000 + \$80,000 = \$700,000 \] --- ## Step 4: Determine Over/Underapplied Overhead \[ \text{Over/Underapplied Overhead} = \text{Applied Overhead} - \text{Actual Overhead} \] \[ = \$750,000 - \$700,000 = \$50,000 \text{ overapplied} \] --- ## Step 5: Answer **Correct answer:** **b. $50,000 overapplied.**

## Objective Determine the amount of overapplied or underapplied manufacturing overhead based on actual and estimated costs and machine hours. --- ## Step 1: Calculate Predetermined Overhead Rate **Formula:** \[ \text{Predetermined Overhead Rate} = \frac{\text{Estimated Manufacturing Overhead}}{\text{Estimated Machine Hours}} \] **Calculation:** \[ = \frac{\$690,000}{46,000} = \$15 \text{ per machine hour} \] --- ## Step 2: Apply Overhead Based on Actual Machine Hours **Formula:** \[ \text{Applied Overhead} = \text{Predetermined Rate} \times \text{Actual Machine Hours} \] **Calculation:** \[ = \$15 \times 50,000 = \$750,000 \] --- ## Step 3: Calculate Actual Overhead Incurred Sum of all actual overhead costs: \[ \$170,000 + \$230,000 + \$120,000 + \$100,000 + \$80,000 = \$700,000 \] --- ## Step 4: Determine Over/Underapplied Overhead **Formula:** \[ \text{Over/Underapplied Overhead} = \text{Applied Overhead} - \text{Actual Overhead} \] **Calculation:** \[ = \$750,000 - \$700,000 = \$50,000 \] This indicates overapplied overhead. --- ## Final Answer The manufacturing overhead is **overapplied by $50,000**.