It is given that Karvel corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. For the month of August, karvel estimated total manufacturing overhead costs at $300,000 and total machine-hours at 75,000 hours. It means the allocated overhead cost for 75,000 hours shall be $3,00,000.
Now Actual results for the period were manufacturing overhead costs of $290,000 and 75,000 machine-hours.
As a result, karvel would have Over applied Overhad (300,000-290,000) = $10,000
