Answer:
a. the total factory overhead amount applied is $ 1,842,800
b. Under-applied Overheads is $ 26,200
Explanation:
<em><u>Applied Overheads </u></em>
Are the Overheads costs accumulated in product cost for the year.
Applied Overheads = Predetermined Overhead Rate × Actual Activity
where Predetermined Overhead Rate = Budgeted Overheads / Budgeted Activity.
Predetermined Overhead Rate = $1,159,400/34,100 machine hours
= $34 per machine hour
Applied Overheads = $34 × 54,200 machine hours
= $ 1,842,800
<em><u>Over- or Underapplied</u></em>
Is the difference between<em> Actual factory overhead </em>and <em>Applied factory Overheads</em>
<em>Actual factory overhead = $1,869,000</em>
<em>Applied factory Overheads = </em>$ 1,842,800
<em>Actual factory overhead ($1,869,000) >Applied factory Overheads ($ 1,842,800), thus we have an under-applied situation.</em>
Under-applied Overheads = $1,869,000 - $ 1,842,800
= $ 26,200