Checker, Inc., produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $9.30 per machine hour was established for 2016.

Required:

a. If 9,900 machine hours were expected to be used during 2016, how much overhead was expected to be incurred?

Budgeted overhead

b. Actual overhead incurred during 2016 totaled $124,375, and 9,100 machine hours were used during 2016. Calculate the amount of over-or underapplied overhead for 2016.(Input the amount as positive value.)

c. Whether the overapplied or underapplied overhead for the year is normally transferred to cost of goods sold in the income statement?

	Yes
	No