Tiffany charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labor hours. the following data pertain to the current year: budgeted manufacturing overhead: $ 3,900,000

actual manufacturing overhead: $ 3,917,000

budgeted labor hours: 130,000

actual labor hours: 132,300

which of the following choices is the correct status of manufacturing overhead at year-end? overapplied by $17,000. underapplied by $17,000. overapplied by $52,000. underapplied by $52,000. overapplied by $69,000.

Overapplied by $52,000.

Explanation:

To know the application of the overhead we need to solve for the predetermined rate first:

we distribute the expected overhead over the expected cost driver. in this case, it is labor hours:

$ 3,900,000 / 130,000 labor hours  = $ 30 per hours

Now we calculate the aplication:

actual labor hours x rate:

132,300 x 30 = 3,969,000

Finally we compare with the actual overhead cost:

applied      -   actual

3,969,000 - 3,917,000 = 52,000

As the cost applied exceed the real cost, we overapplied the voerhead we capitalzie more cost than actual cost.

we face an overapplication of the overhead cost.

answer production department;

answer(b); ; ; the quantitative or qualitative variable for which the experimenter wishes to determine how its value is affected by the explanatory variable;