Answer:
The correct answer is B: $50000 underapplied
Explanation:
Giving the following information:
Tier, Inc. had actual manufacturing overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period.
The manufacturing overhead applied is= 4*290000=$1,160,000
Actual overhead= $1,210,000
Variance= 1,210,000 - 1,160,000= 50000 underapplied
It was underapplied because it incurred in higher manufacturing overhead costs.
