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Pinsir Inc. makes door handles and uses machine hours as the allocation base to allocate overhead. In 2019, Pinsirs manufacturing overhead was $1,000,000 on 5,000
Pinsir Inc. makes door handles and uses machine hours as the allocation base to allocate overhead. In 2019, Pinsirs manufacturing overhead was $1,000,000 on 5,000 machine hours, and the company expects the same level of activities and the same amount of manufacturing overhead for 2020.
Suppose actual overhead in 2020 was $1,200,000, and 5,600 machine hours were billed to customers. Did Pinsir have an over-recovery or under-recovery in manufacturing overhead for 2020, and by how much?
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