The total manufacturing overhead is underapplied or overapplied by how much?

A) $9,216 Overapplied
B) $9,216 Underapplied
C) $47,940 Underapplied
D) $47,940 Overapplied

From the given information, the manufacturing overhead is applied at a rate of $8 per direct labor hour.

Actual manufacturing overhead = $390,000
Actual direct labor hours = 28,800
Actual manufacturing overhead rate = Actual manufacturing overhead / Actual direct labor hours = $390,000 / 28,800 = $13.54 per direct labor hour

Applied manufacturing overhead = Actual direct labor hours x Predetermined manufacturing overhead rate = 28,800 x $8 = $230,400

Overhead variance = Actual manufacturing overhead - Applied manufacturing overhead
= $390,000 - $230,400 = $159,600

Since the actual manufacturing overhead rate is higher than the predetermined rate, there is an underapplied overhead. The answer is B, $9,216 underapplied.

Reference: APP10A-Ref24
(Appendix 9A)A manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHs)as the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: