Maxwell Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended:

Standard variable-overhead rate per hour: $7.20

Standard fixed-overhead rate per hour: $12.20

Planned activity during the period: 17,000 machine hours

Actual production: 11,200 finished units

Machine-hour standard: Two completed units per machine hour

Actual variable overhead: $156,110

Actual total overhead: $445,030

Actual machine hours worked: 23,300

5. Was variable overhead underapplied or overapplied during the year? By how much

Variable overhead is

underappliedselected answer correct

by

$117,170selected answer incorrect