1. A.Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. Determine the over or under applied amount for the year.

a. $17,500 overapplied

b. $17,500 underapplied

c. $118,250 overapplied

d. $118,250 underapplied

1.B. Sanders Inc. has applied $567,988 of overhead to jobs. Actual overhead at the end of the year is $575,000. The adjustment for over or underapplied overhead is

a. $7,012 underapplied, decrease Cost of Goods Sold

b. $7,012 overapplied, increase Cost of Goods Sold

c. $7,012 overapplied, decrease Cost of Goods Sold

d. $7,012 underapplied, increase Cost of Goods Sold